Strong earnings report lifts Blockbuster stock
EmptyShares of Blockbuster Inc. rallied for a second straight day Thursday -- topping The Hollywood Reporter's Showbiz 50 -- this time fueled by a quarterly earnings report that beat Wall Street expectations, which has been a rare occurrence for the company of late.
Blockbuster's third-quarter loss was $24.7 million, down from a loss of $491.4 million a year ago when the company's bottom line was hampered with large impairment and other charges. On an adjusted, per-share basis, Blockbuster lost 8 cents while analysts expected a 10-cent loss.
Shares of Blockbuster, which advanced 2% on Wednesday on news it was tweaking its online offering to better compete with Netflix Inc., surged 9.8% on Thursday to $4.39 on the company's strong financial showing.
Revenue in the quarter fell 3% to $1.3 billion because of store closures. Blockbuster has so far closed 395 company-owned stores worldwide this year, leaving it with about 8,500.
The company boasted a 3.2% increase in domestic same-store movie rental revenue, which chairman and CEO John Antioco called an achievement given the "difficult movie environment."
Antioco said movies that moved through the home video window in the third quarter this year garnered 19% less in theater ticket sales than last year's films.
Overall, same-store revenue declined, primarily because of weakness internationally.
Antioco on Thursday mostly focused on drumming up support for Blockbuster Total Access, the new online service that lets subscribers return movies via mail or at one of the 5,000 Blockbuster stores. Those who choose the latter option are given free movie rentals for each movie returned.
While some observers note that the plan -- launched Thursday with fanfare and a celebrity appearance by Jessica Simpson in Hollywood -- will lead to a bigger spending on movie inventory and even cannibalize its store-based business, Antioco was sanguine.
"We got over worrying about cannibalization two years ago," he said. "This takes online renting to a new level. Our attitude is, if they want to go online, then go to Blockbuster. If you want to stay in a store, great. Now you can do both seamlessly."
Blockbuster added 150,000 subscribers to its service, giving it 1.5 million, 50% more than it had a year ago. Antioco said the service should have 2 million subs by year's end. Netflix, which invented the DVD-by-mail business about seven years ago, had 5.7 million subscribers at the end of the third quarter.
Blockbuster's movie-rental revenue in the third quarter was $908.5 million, while game-rental revenue was $89.1 million. The company sold merchandise, including movies, games and candy, totaling $315.8 million.