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Barnes & Noble Nook business to sink deeper this year

The company now expects a higher loss and lower sales from its Nook units this year.

The Nook HD+ tablet
The Nook HD+ tablet. James Martin/CNET

The Nook business ain't what it used to be.

Barnes & Noble announced yesterday that it expects a higher loss from its Nook business for fiscal 2013, which ends in April. The company didn't reveal specific numbers, but its EBITDA (earnings before interest, taxes, depreciation, and amortization) showed a loss of $262 million for fiscal 2012.

B&N expects overall annual sales from the entire Nook Media business to be less than $3 billion. The Nook business itself includes the tablet, an e-book reader, accessories, and digital content such as books and movies. The Nook Media business includes the entire Nook segment and the company's college segment.

The company previously expected revenues for its Media business to reach around $3 billion.

Last month, B&N acknowledged that Nook segment sales for the holidays were much lower than expected. For the nine weeks ended December 29, Nook business revenue fell to $311 million, a 12.6 percent drop from the same period a year earlier. Though sales of digital content rose, Nook device sales were down.

Barnes & Noble has been looking to its Nook business to generate greater demand in the face of lower sales from its retail chains. But product development and marketing costs have risen, taking a bite out of the Nook's contributions, according to Reuters.

B&N shares slumped 4 percent in after-hours trading yesterday.

The company will hold a conference call at 1 p.m. PT on February 28 to discuss its third-quarter results. But many of the questions will undoubtedly focus on the annual projections and the downturn in the Nook business.

Update, 11:45 a.m. PT: Clarifies that the $3 billion projected revenue is for B&N's Nook Media business.