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More Cuts for Blockbuster

DALLAS-The in-home entertainment chain posts a Q3 loss of $491.4 million, or $2.67 per share, and says it will cut costs by $150 million.

By Jennifer D. Duell | Updated on November 09, 2005

DALLAS-Amid weakness in the video sector and continuedpoor financial performance, Blockbuster Inc. executives say itwill to “take additional steps” to cut costs in 2006and 2007 and will issue $100 million in preferredstock to pay down its debt burden of $1.3 billion.

The chain reported a net loss of $491.4 million, or$2.67 per share, for the third quarter after taking ahit from non-cash charges of $459.1 million, or $2.50per share. Without the charges, which were related togoodwill from Viacom Inc.’s purchase of the company inthe mid-1990s, the chain’s net loss was $24.6 million, or13 cents per share, which was inline with analystsestimates.

Blockbuster chairman and CEO John Antioco says thechain will cut costs by more than $100 million in 2006and $50 million in 2007 by reducing overhead andmarketing spending and by selling off noncore assetssuch as D.E.J. Productions Inc., a wholly ownedsubsidiary.

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