Earnings fall while trying to launch online unit
Blockbuster said Tuesday its fourth-quarter earnings fell 28%, largely due to costs to launch and promote its growing online rental business.The company also said it is trying to resolve a dispute with chairman and chief executive John Antioco over his 2006 bonus. Quarterly net income dropped to $10 million, or 5 cents per share, versus $18 million, or 9 cents per share, a year ago. Adjusted earnings, which factored in a $5.1 million goodwill impairment charge, were $20.4 million, or 9 cents per share, in the October-December period. That compared with earnings of $25 million, or 12 cents per share, a year earlier that were adjusted for a reserve charge. The adjusted earnings were ahead of the 5 cents per share expected by analysts surveyed by Thomson Financial. Revenue edged up 1 percent to $1.51 billion from $1.49 billion in the prior year, surpassing Wall Street’s estimate of $1.47 billion. Blockbuster shares dropped 18 cents, or 2.59 percent, to $6.76 in afternoon trading on the New York Stock Exchange. The shares have traded in a range of $3.20 to $7 in the past year.