Blockbuster Inc., the nation’s biggest movie-rental chain, on Tuesday said it fell to a loss in the second quarter after eliminating late fees cut into its overall revenue.
In the latest three-month period, Blockbuster’s loss was $57.2 million, or 31 cents per share, compared with income of $48.6 million, or 27 cents, the year before.
Setting aside one-time items, the company’s adjusted loss amounted to $40.2 million, or 22 cents per share, but that still missed the average analyst estimate of a loss of 10 cents per share, according to a poll by Thomson Financial.
Quarterly revenue totaled $1.4 billion, down 2 percent from $1.42 billion a year earlier and below analysts’ consensus target of $1.45 billion. Sales at locations open at least a year decreased 4.7 percent, Blockbuster said.
Overall rental revenue dropped 5 percent to $1.02 billion, hurt by a steep decline in late fees, which fell $138.1 million to $20.9 million for the period. Meanwhile, merchandise sales were up 12 percent to $360.4 million.
Looking forward, Blockbuster said the “uncertainty and continued decline in the rental industry” prompted it to withdraw its previous guidance for fiscal 2005. The company said it will continue to provide certain qualitative updates on its business.
The company previously forecast 2005 flat adjusted operating income before $50 million in costs to market and implement its late fee elimination program, and about $40 million in stock-based compensation.