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Books-A-Million still stuck in reverse

Better-than-expected earnings and a pair of upgrades weren't enough to pull Books-A-Million Inc. (Nasdaq: BAMM) out of its six-month slump. Shares of the online bookseller fell 1/2, or 5 percent, to 10 1/8 Wednesday.

On Tuesday, Books-A-Million topped Street estimates in its first quarter, earning $310,000, or 2 cents a share, on sales of $85.1 million.

First Call consensus expected the Birmingham, Ala. company to earn a penny a share in the quarter.

On Wednesday, Robinson Humphrey raised it from a long-term "hold" to a long-term "buy" while Salomon Smith Barney bumped it from a "sell" recommendation to "neutral."

By early afternoon, more than 3.2 million shares had changed hands, roughly five-times its average daily volume.

Books-A-Million shares jumped 12 percent ahead of its earnings report after announcing it would cut prices on New York Times bestsellers by 55 percent in an effort to battle Amazon.com Inc. (Nasdaq: AMZN).

The $85.1 million in sales represented a 14 percent improvement compared to the year-ago quarter when it earned $10,000 on sales of $74.4 million.

The upside surprise couldn't have come at a better time considering Books-A-Million shares have lost more than half their value since it missed analysts' estimates in its fourth quarter.

Last quarter, Books-A-Million earned $6.4 million, or 36 cents a share, on sales of $116.5 million.

Comparable stores sales improved 4.9 percent in the quarter.

Books-A-Million shares erupted in November, surging to an all-time high of 47 after trading at just 2 3/16 in September. Since then, however, the stock has steadily lost ground.

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