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Barnes&Noble.com writes another sorry chapter

The online bookseller falls woefully short of analysts' estimates in its fourth quarter and says it will lay off 350 employees.

    Online bookseller Barnes&Noble.com fell woefully short of analysts' estimates in its fourth quarter Wednesday and announced it will lay off 350 employees, or 16 percent of its staff. It also slashed its sales outlook for 2001.

    In the quarter, Barnes&Noble.com posted a pro forma loss of $54.2 million, or 36 cents a share, on sales of $104.6 million.

    First Call consensus expected it to lose only 31 cents a share.

    Tom Courtney, an analyst at Banc of America Securities, said he was expecting sales of $107 million in the quarter.

    "To be honest, we're not really even covering these guys anymore," he said. "As a standalone stock, this story has run its course. We've had a 'market performer' rating on it forever."

    For the fiscal year, it posted a pro forma loss of $158.2 million, or $1.07 a share, on sales of $320.1 million, compared with a loss of $102.4 million, or 77 cents a share, on sales of $193.7 million.

    Company executives said it will shutter a processing center in New Jersey and a fulfillment center in Kentucky as part of its ongoing consolidation effort.

    Barnes&Noble.com took a $75 million charge in the quarter relating to the impairment of certain equity investments and assets. It will also take a $5 million restructuring charge in the first half of 2001.

    Chief Financial Officer Marie Toulantis told analysts during a conference call to expect sales of between $90 million and $100 million in the first quarter and $420 million and $475 million in the fiscal year.

    Analysts were expecting sales of $507 million in the fiscal year and a loss of 75 cents a share.

    Toulantis said it will likely post a loss of between 75 cents and 85 cents a share in the fiscal year.

    She added that the company may need additional financing during the first half of 2002. It exited the quarter with $217 million in cash and no debt.

    Gross profit margins jumped to 21.1 percent in the quarter, up from 14.1 million in the year-ago quarter when it lost $38.4 million, or 27 cents a share, on sales of $76.2 million.

    Last quarter, Barnesandnoble.com posted a loss of $36.9 million, or 25 cents a share, on sales of $74.1 million.

    The stock closed up 9 cents to $2.13 ahead of the earnings report before falling to $1.80 a share in after-hours trading.

    In January, things got so bad that the stock garnered a rare "sell" recommendation from Prudential Securities analyst Mark Rowen.

    All six analysts following the stock rate it either a "hold" or a "sell."

    Barnes&Noble.com shares moved up to a 52-week high of $12.13 last February before falling to a low of $1.19 a share in December.