Barnes & Noble revenue falls further as Nook sinks

(Reuters) - Barnes & Noble Inc BKS.N, the largest U.S. bookstore chain, reported an 8 percent drop in quarterly revenue as sales fell across all its businesses, including its stores and Nook e-readers and e-books.

Customers enter a Barnes and Noble store in New York June 25, 2013. REUTERS/Brendan McDermid

Barnes & Noble shares fell 3.8 percent to $15.80 in premarket trading, with the sliding revenue highlighting again the bookseller's battle with giant Internet rival Inc AMZN.O.

The Nook sold well after its launch in 2009, but the e-reader has not kept pace with aggressively priced Kindles from Amazon, along with rival tablets from Apple Inc AAPL.O and others.

Revenue in the Nook business, including e-books and devices, fell 32.2 percent to $108.7 million as Barnes & Noble sold fewer e-readers and slashed prices.

The company has lost hundreds of millions of dollars trying to compete with e-readers from large tech companies. This year it said it would only make more tablets if it found a partner.

Overall revenue fell to $1.73 billion in the second quarter from $1.88 billion a year earlier.

The net profit jumped to $13.2 million from $501,000 a year earlier, after the company cut costs in the face of the falling revenue.

Factoring in preferred stock dividends and accretion of dividends on preferred stock, it posted a net profit of 15 cents a share, compared with a loss of 7 cents per share a year earlier.

Analysts on average were expecting a loss of 3 cents per share on revenue of $1.77 billion, according to Thomson Reuters I/B/E/S.

At Barnes & Noble book stores, sales at outlets open at least 15 months fell 4.9 percent.

Barnes & Noble said it still expected retail sales to fall by a high single digit percentage in its current financial year to April 2014.

The retailer has seen turmoil in its top ranks this year. CEO William Lynch, the architect of Barnes & Noble’s failed Nook strategy, quit and founder and Chairman Leonard Riggio withdrew a bid to buy the chain’s retail business.

Reporting by Aditi Shrivastava and Neha Alawadhi in Bangalore; Editing by Rodney Joyce