Video game and movie rental chain Blockbuster Inc. said Wednesday its first-quarter loss widened amid a tough in-store rental market and an investment in its online rental program Total Access.
The company reported a loss attributable to common shareholders of $49.2 million (euro36.16 million), or 26 cents per share, in the three months ended April 1 versus a loss of $4.7 million, or 3 cents per share, in the prior year.
Analysts polled by Thomson Financial were looking for a loss of 16 cents per share.
"Our results were impacted by our investment in the growth of Blockbuster Total Access and by an extremely tough in-store rental market," Chairman and Chief Executive John Antioco said in a statement.
Quarterly revenue rose 5 percent to $1.47 billion (euro1.08 billion) from $1.4 billion in the previous year. Previously rented product revenue climbed to $168.3 million (euro123.7 million) from $151.6 million, while extended viewing fee revenue increased to $19.6 million (euro14.41 million) from $18.8 million. Merchandise sales grew to $392.2 million (euro288.28 million) from $326.7 million.
Wall Street consensus estimates put sales at $1.37 billion (euro1.01 billion).
Operating expenses rose 3 percent to $780.4 million (euro573.61 million), and cost of sales climbed 17.1 percent to $711 million (euro522.6 million).
Separately, Blockbuster said it sold Games Station Ltd., a specialty games retailer in the United Kingdom, to European game retailer The Game Group PLC for about $150 million (euro110.25 million) cash. It bought Games Station, which offers new and pre-owned video games, in October 2002.