NEW YORK ( TheStreet) -- Barnes & Noble ( BKS) is being hush-hush about its future following Borders' bankruptcy last week. While initial analysis would assume Barnes & Noble will benefit from the bankruptcy of Borders, this may not be the case. This realization is weighing down the stock, with shares tanking 10.4% to $16.66 in early Tuesday trading. >>Take our Barnes & Noble poll The book-selling giant declined to provide guidance for the remainder of the year following its disappointing third-quarter earnings results, and said it is suspending its quarterly dividend. >>The Borders Story: Is This the Final Chapter For the three-month period, Barnes & Noble reported a profit of $60.6 million, or $1 a share, down 24% from $80.4 million, or $1.38, in the year prior. Revenue rose 7% to $2.33 billion, while same-store sales jumped 7%. >>Borders Store Closure Map Wall Street was calling for a profit of $1.13 a share on revenue of $2.38 billion.
Barnes & Noble said it is suspending its 25-cent quarterly dividend to preserve its cash to invest in growing its e-reader business, and declined to provide a fourth-quarter forecast, due to Borders bankruptcy last week. The company put itself up for sale last summer, and prior to a Borders bankruptcy it was speculated that the two companies would merge.
Borders Goes Bust: What's Next?
Borders entered bankruptcy protection last week as it grappled with mounting debt and credit concerns. The company said it will continue to operate while in bankruptcy court, but announced that it will shutter 200 locations. Barnes & Noble said during its conference call with Wall Street that it may open some stores in the locations being vacated by Borders. CEO William Lynch said select Borders stores set to shutter "appear attractive to us," and he is hoping landlords may be willing to cut deals on rental costs. This raised questions from analysts about why Barnes & Noble would want to invest more in brick-and-mortar locations. Lynch said Barnes & Noble stores are still profitable and that most of Nook sales occur in stores. In light of Borders bankruptcy and Barnes & Noble's lackluster earnings report, what do you think the future holds for the company? Take our poll and see what TheStreet readers are saying....
--Written by Jeanine Poggi in New York. >To contact the writer of this article, click here: Jeanine Poggi. >To follow the writer on Twitter, go to http://twitter.com/jpoggi. >To submit a news tip, send an email to: firstname.lastname@example.org.