News Barnes & Noble Stocks Drop After Nook Profit Warning
posted on 2013-02-15 23:53 EST
Barnes & Noble's stocks dropped 7.3% on Thursday after the company warned of bad news regarding its Nook e-book reader. The bookstore chain expects that the tablet's revenues for the fiscal year that ends in April will fall below US$3 billion, and the cash flow loss will be “greater than it was in fiscal 2012.” Barnes & Noble stated in January that it expected Nook revenue to exceed US$3 billion during the current fiscal year.
This is the third fiscal year where Barnes & Noble came in under its expectations, according to Maxim Group Analyst John Tinker. The NOOK business “is proving to be expensive — and with slowing revenues makes spinning it off to tech investors harder,” he said. “At some point the company has to quantify the amount it is prepared to lose.”
The company began closing physical stores across the United States during and after a low holiday 2012 sales season. Nook segment sales also fell 12.6% during the same period.
Thanks to Daniel Zelter for the news tip.