Barnes & Noble Considers Split from Nook
Barnes & Noble (NYSE:BKS) announced on Thursday that it is considering splitting off its Nook e-reader business while cutting its full-year earnings forecast on declining sales of its basic touchscreen reader.
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The company also cited higher advertising costs and the costs of international expansion in cutting its forecast, before interest, taxes, depreciation, and amortization, to $150 million to $180 million for 2012. Last month, Barnes & Noble projected earnings in the $210 million to $250 million range.
Despite the downgraded forecast, which saw Barnes & Noble shares tumble 24 percent today, sales of Nook readers rose 70 percent during the nine weeks ended December 31, compared to the year-earlier period, while sales of digital content, from books to apps, newspapers and magazines, rose 113 percent on a comparable basis.
“We see substantial value in what we’ve built with our Nook business in only two years, and we believe it’s the right time to investigate our options to unlock that value,” said CEO William Lynch.
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