Blockbuster’s Q3 loss widens; closing 115 stores
DALLAS (AP) – Struggling movie rental retailer Blockbuster Inc. said Thursday that its third-quarter loss surged more than fivefold as more consumers rented movies by mail or through competitors' vending kiosks instead of driving to its stores.
Blockbuster continues to hemorrhage cash in the quarter as it diversifies its business. The company wants to increase its share of movie rentals by mail and kiosks – arenas where it faces tough competition with Netflix Inc. and Coinstar Inc.'s Redbox – and is working to stream more shows over the Internet through different devices while managing the decline of its stores.
Blockbuster CEO Jim Keyes said the stores are a "cornerstone" of the company's business and still attract 50 million customers a year.
Shares of Blockbuster, based in Dallas, fell 11 cents, or 13.2 percent, to 72 cents in after-hours trading. The stock was up 2 cents to 83 cents during the regular session.
The company lost $116.8 million, or 60 cents per share, compared with a loss of $20.6 million, or 11 cents, in the same quarter a year ago. Excluding one-time costs related to debt refinancing, store closures and severance, Blockbuster had an adjusted loss of $38.3 million, or 20 cents per share, compared with $17.8 million, or 9 cents per share.
Revenue fell by 21 percent to $910.5 million from $1.16 billion.
Blockbuster's performance fell short of the $1 billion in revenue and 11-cent-per-share loss expected by analysts polled by Thomson Reuters. They typically exclude one-time items.
Sales at locations opened at least a year – a key measure of performance because newer stores tend to skew results – fell 14.4 percent worldwide. U.S. sales comparisons were down 18 percent, and nearly 5 percent in international stores.
Blockbuster said it expects to close at most 115 stores in the fourth quarter. That's in addition to the 216 it has closed through the third quarter.
The company said it will have 2,500 Blockbuster Express vending kiosks by year's end.