Blockbuster's net income for the first quarter fell to $27.7 million, or 12 cents per share, from $45.4 million, or 20 cents per share, a year earlier. Excluding one-time items, the profit was 19 cents, surpassing average expectations for 14 cents, according to Reuters estimates.
But who cares? Wall Street sure doesn't have much faith in Blockbuster, even though billionaire Carl Icahn waged a proxy battle against the Dallas-based company a few years ago and remains a major shareholder. In a departure for him, Icahn joined Blockbuster's board in 2005. The activist investor has done little to stop the bleeding.
Shares of Blockbuster have plunged more than 80 percent over the past three years as investors fretted about the impact of everything from Netflix Inc. (NFLX) to stand-alone kiosks to video-on-demand services from cable companies. The stock recently traded for under $1 a share.
The future looks bleak for Blockbuster. "Our current 2009 plan contemplates that worldwide same-store revenues will be lower than what we experienced in 2008," the company said in its most recent 10-Q. "Further deterioration would negatively impact our anticipated revenues and cash flows. Additionally, if our trade creditors were to impose unfavorable terms on us, it would negatively impact our ability to obtain products and services on acceptable terms and operate our business."
Odds are that tighter credit conditions will continue to hurt the company, and that, over the next decade, the Blockbuster brand will be headed for the retail scrap heap.
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