Nook Tablet Revenue Losses Shrink but Content Sales Plummet in Fiscal Q1

Barnes & Noble’s Nook segment -- including devices, accessories and digital content -- had a 22 percent revenue drop in fiscal Q1 to $54 million, said the company. Digital content sales plummeted 28 percent to $37 million on lower unit volume, while device and accessories sales fell 6 percent to $17 million on lower non-bookstore sales, said Chief Financial Officer Allen Lindstrom on an earnings webcast Wednesday. Nook reduced year-over-year expenses by $10 million on continued cost cuts, including lower compensation and consulting expenses, said Lindstrom. Barnes & Noble expects to trim operating income losses further in the Nook segment via “back-office infrastructure opportunities on the technology side." Responding to a question on Nook's break-even outlook, Chief Operating Officer Jaime Carey cited a three-pronged strategy for Nook to reach profitability: increase device sales, boost Nook app downloads and “look at third-party arrangements that will give Nook wider distribution for its content.” Carey called out the recently launched second-gen 8-inch Samsung Galaxy Tab S2 Nook as a potential revenue driver for “how it presents reading.” Overall, Barnes & Noble Q1 sales dipped 1.5 percent to $1.2 billion, while its loss in the quarter widened to $34.9 million, compared with a year-ago loss of $28.4 million. The company completed the spinout of the college segment into a separate company, Barnes & Noble Education. Barnes & Noble stock fell 27.6 percent in Wednesday trading to $11.80.