Blockbuster Posts $23.4M Third-Quarter Operating Loss12 Nov, 2013 By: Erik Gruenwedel
Spending on packaged media inventory plunged 58%
Blockbuster LLC Nov. 12 reported a third-quarter (ended Sept. 30) operating loss of $23.4 million, compared with an operating loss of $11.9 million during the previous-year period. Through the first nine months of the year, Blockbuster has lost $27.9 million.
Revenue dropped nearly 60% to $96.6 million from 400 company stores operating in the United States, compared with $230.8 million from more than 1,000 stores last year. Through nine months of the year, Blockbuster stores have generated $397.5 million in revenue, compared with $818 million last year.
Parent Dish Network Nov. 6 said it would shutter all company-owned Blockbuster stores and its by-mail disc rental business by early January 2014. As a result, Dish expects to incur future Blockbuster-related losses ranging from $15 million to $30 million. The closures will not affect franchise Blockbuster stores.
Notably for content holders and studios, Blockbuster’s rental library of movies and TV shows in the third quarter dropped 58% to $34.5 million from $81.9 million at the end of December, 2012. Merchandise inventory dropped 70% to $22.3 million from $76.1 million in December.
The decrease in Blockbuster inventory was primarily related to the deconsolidation of Blockbuster U.K. on Jan. 16, Blockbuster domestic store closings and the write down of inventory associated with Blockbuster operations in Mexico during the quarter.