(Blockbuster article updated from May 13.)

NEW YORK ( TheStreet) -- Blockbuster ( BBI) continues to tumble after it reported yet another quarterly loss on Thursday.

During the first-quarter, the movie rental retailer lost $65.4 million, or 33 cents a share, compared with a profit of $24.9 million, or 13 cents a share, in the year-ago period for Blockbuster.
Blockbuster

Excluding costs, Blockbuster actually lost 14 cents a share, in-line with analysts' estimates.

Revenue dropped 13.5% to $939.4 million, from $1.09 billion, while same-store sales declined 7.1%.

"We expect the next 12 to 18 months will remain challenging. For the full year of 2010, we remain focused on the following financial initiatives: lowering our debt service costs; aggressively reducing operating expenses; preserving liquidity through operational efficiencies; and focusing on improving top line performance," Executive Vice president and CFO Tom Casey, said in a statement. "Also, following their liquidation and store closures, we believe Movie Gallery store closings could favorably affect hundreds of Blockbuster locations."

Shares of Blockbuster plunged 19% to 41 cents in Friday trading. Investors were hoping for a surprise from the quarter, driving up the stock more than 15% before results were released.

Blockbuster has been teetering on bankruptcy, revealing earlier in the year that if it doesn't shore up enough cash to repay its $1 billion in debt, it may need to file Chapter 11.

But Needham analyst Charles Wolf said behind this loss, Blockbuster's first quarter results began to show some signs of life. "Most importantly, management appears intent on restructuring the company's debt without resorting to a Chapter 11 filing," he wrote in a note.

Blockbuster has been aggressively shuttering stores, eliminating 288 locations during the first quarter and another 188 in April. Instead, it is focusing on growing its kiosk business.

On Thursday the company said it plans to add kiosks to 300 Kwik Trip convenience stores in the Midwest in an effort to compete with rivals like Netflix ( NFLX) and Coinstar's ( CSTR)Redbox.

Other positives in the quarter include the easing decline in same-store sales, the closure of Movie Gallery, and "day and date" releases of new DVDs from three major studios, Wolf said. This will allow Blockbuster to receive new movies 28 days earlier than Netflix and Redbox.

Another highlight was the double-digit gain in digital streaming revenues. While this only makes up a small part of its business, it could be a vehicle for potential growth.

-- Reported by Jeanine Poggi in New York

Follow Jeanine Poggi on Twitter and become a fan of TheStreet on Facebook.