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

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

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 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!