The home video category apparently wasn't recession-proof enough for Blockbuster (NYSE: BBI), which said Q1 net income plunged 39 percent to $27.7 million ($0.12 per share) from $45.4 million the year before. On an adjusted basis, profits were $41.3 million ($0.19 per share). Revenues fell 19.4 percent to $1.12 billion, compared to total revenues of $1.39 billion in Q108. A FactSet Research analyst poll expected a profit, excluding items, of $0.15 cents per share with $1.29 billion in revenue, according to MarketWatch. The company cited poor store sales and the lack of a major Q1 hit like last year's I Am Legend, which accounted for the difference in earnings results.
Still, Blockbuster's poor performance only looks worse when compared to rival Netflix's comparatively stellar Q1, which was up 68 percent as revenue rose 21 percent. Blockbuster was done in by 10.9 percent lower same-store sales. The company made no mention of its online activities like Total Access, which was meant to meet the challenge by Netflix's online subscriptions offering. As MKTW pointed out, Blockbuster raised prices on its Total Access service, which only seemed to turn more consumers away, ultimately benefiting Netflix.
By David Kaplan