If Blockbuster (BBI) continues to lose sales at this rate, it could be gone completely in a couple of years. For its latest quarter, revenue dropped to just over $1 billion from $1.3 billion in the same period a year ago. Because of extremely aggressive cost cutting, net loss was $39.7 million, or 21 cents a share compared to $44.7 million or 23 cents in the same period a year ago.
Blockbuster only has $99 million in cash and cash equivalents and its forecast for the balance of the year was depressing. It adjusted its EBITDA prediction down by $30 million to a range of $270 million to $290 million.
The most troubling thing about the Blockbuster earnings announcements was not expressed in dollars, but in same-store sales, which were down 17.8 percent domestically.
When the history of Blockbuster is written, probably after it is gone, the question that analysts will ask is whether the company could have been saved. It might have had a chance if it had gotten into the VOD-over-the-internet or CD- through-the-mail businesses years ago -- before NetFlix (NFLX).
It is easy to look back and say that Blockbuster simply didn't see a future in which people wouldn't rent movies from stores. It was such a good business it was probably hard for management to admit to itself that such a success could ever end.
Douglas A. McIntyre is an editor at 24/7 Wall St.