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Blockbuster raises its fiscal outlook

Earnings Roundup

August 08, 2008|From Times Wire Services

Blockbuster Inc. suffered another loss in the second quarter, but the struggling movie rental chain showed signs of progress by wringing more revenue from its stores while lowering its costs.

Heartened by its rising sales, Blockbuster modestly raised its outlook and predicted it would produce a profit of $21 million to $36 million for the entire year.

"To paraphrase Mark Twain, the demise of Blockbuster has been greatly exaggerated," Chief Executive James Keyes told analysts.

But investors weren't impressed. Blockbuster shares fell 31 cents to $2.88.

The company said it lost $44.7 million, or 23 cents a share, worse than its setback of $34.2 million, or 18 cents, a year earlier.

After stripping out costs for store closures, employee layoffs and an aborted takeover bid for Circuit City Stores Inc., Blockbuster said its second-quarter loss totaled 20 cents a share. That figure was a penny worse than the average estimate among analysts surveyed by Thomson Financial.

Blockbuster's revenue for the quarter totaled $1.3 billion, up 3% from last year.

In a more telling indicator of a retailer's health, Blockbuster's same-store sales rose 9%. This yardstick measures the performance of stores that have been open for at least the last year.

As part of its comeback attempt, Blockbuster closed or sold 233 stores during the last year, leaving the company with fewer revenue channels.

Blockbuster, which is based in Dallas, operates 7,619 stores worldwide.

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