CHICAGO (MarketWatch) -- Video rental giant Blockbuster Inc. said Thursday that it swung to a second-quarter profit from a loss in the prior year on the favorable resolution of some tax audits and a gain related to the sale of its Spain operations.
CHICAGO (MarketWatch) -- Video rental giant Blockbuster Inc. said Thursday that it swung to a second-quarter profit from a loss in the prior year on the favorable resolution of some tax audits and a gain related to the sale of its Spain operations.
Dallas-based Blockbuster (BBI) said it earned $68.4 million, or 31 cents a share. In the same quarter last year, it loss $57.2 million, or 31 cents a share.
Excluding gains, Blockbuster would have lost $21.4 million, or 13 cents a share, in the latest three months.
Revenue fell 5% to $1.32 billion on the impact of store closures and lower margin retail sales.
Analysts polled by Thomson First Call were expecting a loss of 8 cents a share on revenue of $1.35 billion.
Blockbuster shares had plunged 11.3% to $4.15 by Thursday afternoon.
In the U.S., same-store rental revenue, or revenue at Blockbuster has owned at least a year rose 3.8%.
Worldwide same-store rental revenue was about flat with a year earlier, while worldwide same-store revenue dropped 9.2% from the year-ago quarter.
Comparisons continued to ease for the company, as the latest quarter was only the second in which the year-earlier period did not include late fees.
Last year, a decline in box-office receipts for theatrical films negatively impacted business in most of the video rental and sales industry, even as home-entertainment systems became more sophisticated.
"Our profitability and cash flow have improved significantly year-over-year, and as a result, our balance sheet is much healthier," said John Antioco, chief executive of Blockbuster. "We have also gained momentum in our online business. In short, we achieved our objectives for the quarter and will continue to work toward driving improved results while focusing on our combined in-store and online offering."
Blockbuster launched its online business in late 2004, in reaction to the emergence of online DVD-rental firm Netflix (NFLX). Because Netflix doesn't charge late fees, Blockbuster felt compelled to drop them, taking a lucrative source of revenue off the table in the process.
Links
