OPINION: Stock block
By Paul Sweeting -- Video Business, 11/7/2008
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Since re-emerging as a stand-alone public company in 1999, its shares consistently have carried a discount to reflect the video rental store’s presumed imminent obsolescence.
The only investors who ever seem to show Blockbuster some love are short sellers, and that’s not the kind of love most companies cherish.
Still, the market’s reaction last week to Blockbuster’s third-quarter earnings was one for the ages.
Although the company reported a net loss for the quarter, its results actually beat analysts’ expectations handily.
Analysts expected Blockbuster to lose about 16¢ a share in the quarter, but the actual loss was closer to 11¢. That’s a nickel-a-share “beat.”
It also beat last year’s quarter by 48%.
Most impressive, same-store sales rose 5.1% in the quarter.
Management also reaffirmed its positive Q4 and full-year guidance, which includes beating last year’s quarter by 50%.
Finally, the company said it is taking steps to be able to finance its strategic plan out of cash flow next year in the event that it is unable to obtain a new credit facility on favorable terms, given the uncertainty in the credit markets.
Read the full column at ContentAgenda.com.
