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

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 18,162.99 121.45 0.67%
Nasdaq 5,106.59 73.84 1.47%
S&P 500 2,123.48 19.28 0.92%
Treasuries 2.14 -0.00 -0.09%
Data as of 10:21pm ET
Company Price Change % Change
Bank of America Corp... 16.74 0.24 1.45%
Michael Kors Holding... 45.93 -14.66 -24.20%
Broadcom Corp 57.16 10.24 21.81%
Apple Inc 132.04 2.42 1.87%
AbbVie Inc 67.38 1.28 1.94%
Data as of 4:04pm ET
Sponsors

Sections

Walmart settled with comedian Tracy Morgan over a crash that left him seriously injured. A Walmart truck rear-ended a limo bus Morgan was riding in on the New Jersey Turnpike nearly a year ago. More

Workers with college and graduate school degrees saw their wages fall the most last year. The least educated saw a slight bump in pay. More

Apple's new "CarPlay" system, which allows drivers to use iPhones behind the wheel, is raising concerns among auto safety experts. More

Karlos Dansby, a linebacker with the Cleveland Browns, is bringing his winning strategy from the football field into the startup arena. More

Apple's new "CarPlay" system, which allows drivers to use iPhones behind the wheel, is raising concerns among auto safety experts. More