Blockbuster lowers guidance after dismal December
Santa didn't bring any gifts to Blockbuster Inc. last month.
The struggling DVD rental and sales chain warned investors today that its earnings for the fiscal year ended Jan. 3. would be significantly worse than it previously expected.
The company said its income before certain costs including income tax, depreciation and amortization (EBITDA) would be $195 million to $205 million. In August, it said that number would be $270 million to $290 million and chief financial officer Tom Casey reiterated that figure in a November conference call with analysts.
Net loss without any adjustments was $183 million to $193 million for the fiscal year, Blockbuster said. The company in August had said its loss would be no worse than $15 million.In a statement, Chief Executive Jim Keyes attributed the swing to "performance during the holidays [that] was well below expectations." The company had invested in higher inventory and marketing to try to drive growth after a year of cutting costs to deal with huge debt payments. That effort apparently failed, raising more questions about whether Blockbuster can survive against its fast-growing competitors Netflix and Redbox.
Following the announcement, Blockbuster stock fell 12 cents in after-hours trading on the New York Stock Exchange to 64 cents.