Q2 Preview: Barnes & Noble (BKS) Loss Expected to Be Markedly Lower Y/Y, Challenges Still Loom (BGP)

November 29, 2010 3:14 PM EST
Barnes & Noble, Inc. (NYSE: BKS) is higher ahead of the company's second quarter earnings report, expected out before the market opens tomorrow, November 30. The stock is up 0.3% in afternoon trading.

The retailer is expected to report a loss of $0.08 per share on $1.98 billion of revenues. Last quarter, the company posted a loss of $1.02 on revs of $1.4 billion, missing estimates on the top and bottom. For the same period in 2009, BKS reported a loss of $0.30 per share, with revs of $1.16 billion, both in-line with the consensus.

Shares of the company gained 10% through the quarter to $14.98 at the end of October. The stock is just about flat since the end of the quarter, and down 18% on the year.

Data from Bloomberg has no analysts with a Buy rating on the stock, three with a Hold, and four recommending to Sell the shares. The analyst price target average is $14.70, with a high of $18 and an low of $10.

The company's estimated loss per share of $0.08 is a 73% improvement from the loss of $0.30 reported in Q210. The number may indicate a "leveling off" of losses, if you will.

Driving around this weekend did afford us the opportunity to see (and not just on Friday) that rival Borders Group (NYSE: BGP) had several stores advertising that they were going out of business. This may or may not trickle over to BKS.

Additionally, another sign was Goldman Sachs upgrading the shares in early August from Sell to Neutral based solely on their potential as a takeover target, as was the same at Oscar Gruss in August.

Investors will be paying attention to comment about their 'strategic alternatives" process, margins, and sales of their NOOK eReader.

Barnes & Noble, Inc. is expected to release their Q211 earnings on Tuesday, November 30, 2010, at approximately 7:00am EST. Stay tuned to StreetInsider.com's EPS Central section to see our analysis of the highly-anticipated quarterly results within seconds of their release.

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