Barnesandnoble.com meets 4Q loss prediction

Jan. 2, 2002 4:43 p.m. PT

2 min read

Barnesandnoble.com (Nasdaq: BNBN) lived up to its pre--announcement and reported strong sales for the fourth quarter Tuesday with a loss of 27 cents a share, in line with First Call's estimate.

Shares in the company, majority owned by Barnes & Noble Inc. (NYSE:BKS) and German publisher Bertelsmann AG, were up 1/16 to 11 3/4. The stock has traded in a narrow range since last summer and through last month, when the company said fourth-quarter sales would triple, but loss would be in line with projections.

Sales for the fourth quarter ended Dec. 31 more than tripled to $82.1 million, from $25.9 million in 1998's fourth quarter. Sales for the full year ended December 31, 1999 were $202.6 million, more than three times sales of $61.8 million a year ago.

Net loss for the quarter was $38.4 million, or 27cents a share, compared with a net loss of $31.3 million, or 27 cents a share for 1998's quarter. For the full year, net loss was $102.4 million, or 77 cents a share, compared with a loss of $83.1 million or 72 cents a share for 1998.

"We see 2000 as a key inflection point, which sets the stage for significantly decreasing losses in 2001 and we anticipate a quick rise to profitability in 2002 as we benefit from leveraging our investments," CFO Marie Toulantis said in a press release. The company forecast a compound annual growth rate of about 40 to 50 percent for 2001 through 2004.

The company continues to battle for market share against Amazon.com Inc. (Nasdaq: AMZN), which said it sees profitability ahead in its most recent quarterly report.

Amazon.com boosted investor confidence last week when it said its U.S. bookselling division was profitable during the quarter and that it expected the trend to continue through 2000. But U.S. book sales for Amazon.com still account for less that half of total company sales.

While Amazon has expanded its lines of merchandise, Barnesandnoble.com has focused on books. The company said it plans to improve margins through other revenue streams such as the company's co-branded credit card with MBNA, from which it anticipates revenue of $25 million over the five-year deal. Strategic partnerships with companies such as Enews and Microsoft (Nasdaq: MSFT) are also expected to be a plus, the company said.