Earnings Preview: B&N 1Q could offer Nook clues

Analysts expect bigger loss in Barnes & Noble's 1st quarter, look for Nook update

Associated Press

NEW YORK (AP) -- Barnes & Noble, still reeling from the departure of its CEO a month ago, could shed light on future plans for the company when it reports first-quarter results on Tuesday.

Analysts expect a bigger loss on lower revenue in the bookstore chain's fiscal first quarter.

WHAT TO WATCH FOR: Barnes & Noble said abruptly last month that its CEO William Lynch was leaving, but did not name a replacement. Instead, the New York company said that it is reviewing its strategic plan and will provide an update "when appropriate."

The company also said that it would stop making its own Nook color touchscreen tablets because they failed to keep up with competitors.

Barnes & Noble has invested heavily in its Nook unit to offset rising competition for physical books from online stores and discounters, as well as readers' tastes shifting to electronic formats. But that strategy has not been working. Investors will be looking for an update on what Barnes & Noble plans to do with its Nook unit.

There has been speculation that Microsoft, which has a 6.8 percent stake in the Nook unit, could offer to buy it outright. Barnes & Noble and Microsoft have said they don't comment on rumors. Analysts will be interested in any hints Barnes & Noble gives about the Nook's future.

As far as the other parts of B&N's business, analysts will also be looking for an update about Leonard Riggio, Barnes & Noble's founder, who has offered to buy the physical bookstores and website of Barnes & Noble, but not the Nook unit.

WHY IT MATTERS: New York-based Barnes & Noble's sales of books and e-books can give insight into how well the publishing industry is doing and how it is evolving.

WHAT'S EXPECTED: Analysts expect a loss of 96 cents per share on revenue of $1.32 billion in the February to April quarter.

LAST YEAR'S QUARTER: A year ago, Barnes & Noble's net loss totaled $1.12 per share on revenue of $1.4 billion.

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