Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Barnes & Noble shares tank on earnings, dividend news

Barnes & Noble shares declined Monday.Click chart to track Barnes & Noble shares. By Charles Riley, staff reporter


NEW YORK (CNNMoney) -- Shares of Barnes & Noble tanked more than 14% Tuesday after the bookseller missed on its earnings and suspended its dividend payment.

The company reported third quarter earnings of $60.6 million, or $1 per share, on sales of $2.3 billion. Analysts surveyed by Thomson Reuters had expected earnings per share of $1.13.

The company also said its board of directors has decided to suspend its annual dividend payment of $1 per share in order to invest in its digital products.

The market reacted swiftly, sending shares more than 15% lower at one point. Shares closed the day down $2.67 at $15.94.

Retailers have tried to evolve by incorporating e-book readers, like Barnes & Noble's Nook, into their inventory, with mixed success. But Barnes & Noble (BKS, Fortune 500) did report strong online sales this quarter, and comparable store sales ticked up by 7.3% over last year.

Borders, the second-largest book retailer behind Barnes & Noble, announced last week it had filed for bankruptcy and was closing nearly one-third of its 659 stores. The closures are expected to be completed in April.

Barnes & Noble said Wednesday that because of its competitor's store closings and the impact on the retail market, the company would not issue earnings guidance for the rest of the fiscal year.

But the Borders bankruptcy might present an opportunity for Barnes & Noble. The company noted that suspending its dividend it would allow it to "take advantage of any other market opportunities that may present themselves."

That might mean Barnes & Noble is looking to pick up a few Borders store locations should they come up for sale, according to Peter Wahlstrom, an analyst at Morningstar Investment Services. Or the company could invest most of that cash in it's digital business.

The dividend cut makes sense in the grand scheme of things, Wahlstrom said.

"If nothing else, it goes to support management's view that there is still much more growth on the digital side of the business," he said. To top of page

Search for Jobs

Index Last Change % Change
Dow 17,949.37 19.38 0.11%
Nasdaq 4,862.57 19.90 0.41%
S&P 500 2,102.95 4.09 0.19%
Treasuries 1.46 -0.03 -2.15%
Data as of 10:40pm ET
Company Price Change % Change
Bank of America Corp... 13.10 -0.17 -1.28%
Micron Technology In... 12.50 -1.26 -9.16%
Ford Motor Co 12.72 0.15 1.19%
Chesapeake Energy Co... 4.59 0.31 7.24%
General Electric Co 31.49 0.01 0.03%
Data as of 4:04pm ET
Sponsors

Sections

Zenefits' new valuation is part of an agreement with investors announced by CEO David Sacks on Thursday. More

Investors are already sifting through the Brexit market rubble for opportunities. Morgan Stanley compiled a list of highly-rated stocks that have limited or no direct exposure to the situation in the U.K. More

The New Jersey Senate and Assembly disagree over which tax cuts should accompany a 23-cent-per-gallon hike in the state's gas tax. As a result the hike won't go into effect Friday. More