This story was written by Tameka Kee.
Blockbuster is trying to do everything it can to stay relevant—from brokering deals to get its OnDemand streaming service in Samsung TVs, to rolling out rental kiosks, to renting films through TiVo—but judging from its Q2 earnings performance, rivals like Netflix and Redbox continue to chip away at its core in-store movie rental business.
Blockbuster (NYSE: BBI) lowered both its operating and net losses from a year ago, but still couldn’t scrape up a profit. Its 19-cents per share loss was much higher than the Street’s expectation of just 10-cents.
Revenue also fell short of the Street’s estimates: Q209 sales came in at $1.02 billion, down 22 percent year-over-year, and just shy of the $1.1 billion analysts had expected. Same-store sales dropped by 17.8 percent year-over-year—reflecting the slowdown in foot traffic as more people rent films by mail, online or at the Redbox kiosks.
|2Q 2009||2Q 2008||Analysts Estimates For 2009|
And Blockbuster isn’t expecting things to get better—as it lowered guidance for the rest of the year. The company forecasts a full-year EBITDA to range between $270 million and $290 million, down from the $305 million to $325 million in predicted in Q1. CFO and EVP Tom Casey attributed the lowered forecast to “ongoing challenging trends” and “continued softness in top line performance.” Shares dropped by 22 percent in the wake of the poor report.
By Tameka Kee