Barnes & Noble Results Mixed

Barnes & Noble Inc. (NYSE: BKS) reported fiscal second-quarter 2013 results before markets opened this morning. The bookstore chain reported a diluted earnings per share (EPS) loss of $0.04 on revenues of $1.88 billion. In the same period a year ago, B&N reported a net loss of $0.17 per share on revenue of $1.89 billion. This morning’s results also compare to the Thomson Reuters consensus estimates for a net loss of $0.06 per share and $1.91 billion in revenue.

The company’s CEO said:

In addition to growing our EBITDA 16% during the quarter, the company also completed the formation of our promising NOOK Media subsidiary and closed our investment from Microsoft. We expect our two highly acclaimed new NOOK products, and our Microsoft partnership on Windows 8 to further fuel the growth of our digital business, and are encouraged by the promising start to the holidays in our retail and digital businesses.

B&N is expecting a lot from its joint venture with Microsoft Corp. (NASDAQ: MSFT). Nook sales accounted for just $160 million in quarterly revenues, up 6% from the same period a year ago. Digital content sales rose 38% year-over-year. The company’s most recent Nook products did not contribute any revenue in the recently completed quarter.

Nook sales also got a boost from B&N’s partners, Wal-Mart Stores Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT). The company said Nook sales doubled over the four-day holiday weekend.

In its retail segment, B&N said that same-store sales were flat, but that the impact of closing Borders stores is beginning to have a favorable impact on sales.

B&N’s shares are up fractionally in premarket trading this morning, at $16.15 in a 52-week range of $9.35 to $26.00. Thomson Reuters had a consensus analyst price target of around $17.80 before today’s results were announced.

Paul Ausick