Blockbuster will report earnings on Thursday morning, and The Houston Chronicle has an earnings preview story that includes the following analyst predictions:
Citi Investment Research analyst Tony Wible said in a Monday client note that he expects Blockbuster's earnings report to indicate a slowdown in the online rental industry. This would be a positive for Blockbuster as it makes significantly more money from in-store rentals, Wible said.
Barton Crockett of JPMorgan Securities said his analysis of in-store video rental revenue data for the industry indicates Blockbuster's rentals were likely soft in the quarter. He predicts a third-quarter loss of 19 cents per share on revenue of $1.27 billion.
Wedbush Morgan Securities analyst Michael Pachter predicts a quarterly loss of 21 cents per share on sales of $1.23 billion.
"We believe Blockbuster lost approximately 150,000 subscribers this quarter, ending with 3.45 million subscribers (down from 3.6 million in the second quarter)," he wrote in an Oct. 16 client note.
If Blockbuster lost 150,000 customers in Q3, and Netflix gained around 280,000, that means that the online DVD rental market grew by less than 150,000 customers in Q3. Netflix is predicting that they will add 300,000 - 500,000 subscribers in Q4, but I wonder if Blockbuster (now focused on retail and spending much less on marketing) will offset the industry growth by losing more customers in Q4.
What do you think?