Blockbuster Upbeat on Financials22 Oct, 2008 By: Erik Gruenwedel
On a day the Dow Jones industrials fell more than 500 points on fears of poor earnings forecasts, Blockbuster issued a beacon of hope.
The Dallas-based No. 1 DVD rental service said third-quarter domestic same-store sales increased 5.1%, with same-store rental revenue up 0.8%. It also reiterated previously announced full-year 2008 adjusted EBITDA guidance from $300 million to $315 million, which corresponds to net income in the range of $21 million to $36 million.
Rental services such as Netflix, Blockbuster and Redbox have remained buoyant as analysts contend the industry represents an antidote to the economic downturn by offering a cost-effective home entertainment option.
"Blockbuster's core rental offering provides customers with an excellent value, which is especially important in these challenging times,” said chairman and CEO Jim Keyes in a statement. “We believe this consumer value, along with the steps we are taking to control costs and transform Blockbuster into a multi-channel provider of entertainment, positions us well for both the near- and long-term."
Separately, Blockbuster declared a quarterly cash dividend of $18.75 per share on its shares of 7-1/2% Series A preferred stock. The dividend will be payable Nov.
Blockbuster reports full third-quarter results Nov. 6.