Blockbuster reports 2009 loss of $558M
Aggressive competition and disappointing holiday sales at Blockbuster Inc. resulted in the movie rental company reporting a net loss of $558.2 million for fiscal 2009.
CEO Jim Keyes took the chance to speak honestly about the results in a statement, saying “the next 12 to 18 months will remain challenging as we balance the secular decline of a single channel with the ascension of emerging channels.”
Blockbuster for the entire year posted a net loss of $558 million, or $2.93 per share, on revenue of $5.065 billion. That is a much deeper loss than in fiscal 2008, when the company lost $374.1 million, or $2.01 per share, on revenue of $4.062 billion.
The company’s fourth-quarter results also showed signs of a business that is struggling against emerging media trends and a business cycle that has been unforgiving to companies in general.
During the fourth quarter, Blockbuster posted a net loss of $434.9 million, or $2.24 per share, on revenue of $1.084 million. The company posted a net loss of $359.8 million, or $1.89 per share, on revenue of $1.314 million in the fourth quarter of 2008.
Fourth-quarter 2009 results were hit by a confluence of factors, including a 14 guaranteed approval cash loans.7 percent drop in same-store sales, a reduction in company-owned stores and competitive pressures from other movie rental-retail companies.
In late 2009 and early 2010 Blockbuster closed six stores in the Jacksonville area.
To compete, Blockbuster said it intends to grow its by-mail video rental channel and continue to expand its digital movie offerings through On Demand to compete against new movie rental media.
Blockbuster also said it intends to leverage its relationship with NCR Corp.
In 2008, Blockbuster (NYSE: BBI), based in Dallas, and NCR, based in Dayton, Ohio, announced an agreement to test digital movie-downloading kiosks in select Blockbuster locations. Blockbuster said it expects through its relationship with NCR to add 7,000 Express kiosks to grow business.
About 35 kiosks have opened in Publix Super Markets Inc. stores in the Jacksonville area since the fall of 2009.
Filed under: legal by Wolf