Blockbuster Posts Q1 Profit; Icahn Goes After Yahoo!

Blockbuster posted $45 million in net profit for Q1, but total revenue decreased by $79.8 million to $1.39 billion.

"The significant improvement in our first quarter results demonstrates the underlying strength of our core rental and emerging retail business," said Jim Keyes, Blockbuster Chairman and CEO. "BLOCKBUSTER Total Access™, our subscription rental offering, is now profitable and positioned for growth. Additionally, our stores achieved positive growth in both sales and margin. We are particularly pleased that domestic same-store revenues showed an improvement for the first time in five years primarily as a result of several initiatives we have put in place, including an increased availability of top new movies, improved store merchandising and more effective pricing. Going forward, we are confident we can continue to grow our core business, which will enable us to focus on aggressive development of our digital offerings. Our ability to provide convenient access to both physical and electronic media entertainment will provide Blockbuster a meaningful competitive advantage and allow us to create enhanced shareholder value over the long-term."

In addition to backing Blockbuster's bid for Circuit City, Carl Icahn is leading a proxy fight to take over Yahoo! You can read his letter to the Yahoo! board if you're interested.

Thanks to Matthew for sending this in.

Comments

[vio]

Wow. I guess whatever Jim Keyes is doing, he's doing it right. This kind of spits in the face of everyone who's been predicting Blockbuster's demise for god knows how many years now.

Still, I don't think they can rely on the dated brick & mortar business model for the next 10 years.

Of course one's profit would skyrocket when one does not send any discs to customers. Mark just about everything as "available" but don't really have anything to ship.

Revenue+No expense=Profit big time :-)

[Brit]

If thats true then they are finally learning something from Netflix.

However, I have never had them not ship me a disc if I had a movie available in my queue.

Netflix delays shipping to the next day on a weekly basis.

I'll never go back to Blockbuster. They doubled my rate from 17.99 to 34.99 then bragged that it would loose "lower profit customers" well they lost me for good.

[MarkusM]

I suppose those "lower profit customers" are getting better treatment from Netflix when they have to wait month after month after month for a movie that won't ship because they have a lower profit per rental. (reference movies not being shipped story a few notches above this story)