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Posted by Bob on 09/02/05 15:27
Copyright 2005 MarketWatch, Inc.
Blockbuster won't pay dividend
By Michael Baron
NEW YORK (MarketWatch) - Struggling with increased competition and
declining revenue from its decision to stop charging late fees,
Blockbuster said early Friday that its board has decided the company
won't pay a dividend for the third quarter.
The news sent shares of Blockbuster (BBI: news, chart, profile) down
more than 4% to $6.02 in early trading, scraping to a 52-week low of
$5.90 in the process.
"As Blockbuster works to transform itself in the face of some very
challenging market dynamics, the board has determined that at this
time it is more important to use the cash, which would have been used
to pay a quarterly dividend, for the business," it explained in a
brief press release.
Early in August, the Dallas-based movie rental company posted a
second-quarter loss of $57.2 million, or 31 cents a share, down from a
year-ago profit of $48.6 million, or 27 cents a share.
On an adjusted basis, excluding items, it lost $40.2 million, or 22
cents a share, in the June period. Revenue slipped 1.6% in the three
months ended in July to $1.4 billion from $1.42 billion in the same
period a year earlier.
This performance was below the average estimate of analysts polled by
Thomson First Call was for a loss of 10 cents a share in the second
quarter on revenue of $1.45 billion.
The company said its elimination of extended viewing fees reduced
revenue by roughly $140 million in the quarter.
Blockbuster also withdrew its outlook for the full year, at that time,
saying it's no longer on track to meet a projection for adjusted
operating income in 2005 coming in flat with its 2004 performance due
to a continued decline in the store-based rental industry.
The Friday loss comes on top of it Thursday finish of $6.28, down
4.4%. Three years ago, it was trading north of $26.
--
Greatest Movie Line Ever
http://home.houston.rr.com/rkba/MovieLine.wmv
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