Barnes & Noble, Inc. (BKS) Turnaround?

Page 1 of 2

Barnes & Noble, Inc. (NYSE:BKS) reported a 94.2% decline in earnings before interest, tax, depreciation, and amortization. Meanwhile, the stock rallied in the Wednesday trading session by 4.3%. How can a stock rally after the company reported a 94% decline in earnings year-over-year? But, believe it or not, there are a lot of positives when it comes to investing into the company.

Barnes & Noble, Inc. (NYSE:BKS)Earnings highlights and forward-looking analysis

The company is planning on spinning off its Nook segment. Well not exactly spin-off, but develop partnership agreements whereby a company would be taking on all of the risks, and costs, of operating a tablet business. What Barnes & Noble, Inc. (NYSE:BKS) will supply is distribution of the tablet device in its stores, certain software features like the Barnes & Noble, Inc. (NYSE:BKS) reader app, and the Nook brand. This will lower the amount of money lost from the Nook business segment. The company reduced its Nook-segment-related spending by 34%.

The company reported a 5.9% decline in revenue year-over-year because there weren’t any blockbuster book hits that could replace the Hunger Games and Fifty Shades of Grey. On the other hand, it was able to grow revenue in its college segment by 10.7%. The college segment is going to be the company’s fastest-growing business segment.

Going forward, the Nook will lose the company less money. Barnes & Noble, Inc. (NYSE:BKS) will continue to close losing retail stores and will continue to grow its college-book campus business. Analysts on a consensus basis anticipate earnings to grow by 61.9% in the current fiscal year, which will have to be driven by falling costs.

Microsoft Corporation (NASDAQ:MSFT) the potential partnership contender

Microsoft Corporation (NASDAQ:MSFT) could be the potential contender for partnership. The company was hoping to buy out the Nook business for $1 billion. But the next best alternative is to take on the risk of developing, marketing and selling Nook devices.

The Nook has an established market presence, and all it really needs is broader distribution. The technological sophistication of Microsoft Corporation (NASDAQ:MSFT) and its success in consumer electronics clearly demonstrates that the company could turn the Nook into a more successful business.

Source: Statista

The Barnes & Noble, Inc. (NYSE:BKS) Nook HD commands 8% market share. Going forward Barnes & Noble is hoping to collect revenue from media sales. If that is the case, then its partnership with Microsoft could be lucrative. Microsoft will get a device that has an established market presence and distribution channel.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!