Barnes & Noble swings to 2Q profit

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NEW YORK (AP) — Barnes & Noble returned to a profit in the fiscal second quarter as cost
cuts offset lower sales.TheNew York company’s sales missed expectations, however, and its sharesfell 6
percent in midday trading. The report comes as the crucialholiday season kicks off, when retailers can make
up to 40 percent oftheir annual revenue.Barnes & Noble has been evaluating itsstrategy for its Nook
e-book reader after years of investing heavily inthe business and developing a color tablet, the Nook HD+,
that has facedtough competition from Amazon’s Kindle and the Apple iPad.Thingshave been in flux since June
when CEO William Lynch left the company,which has not named a replacement. It introduced a new non-tablet
e-bookreader, a $119 Nook GlowLight, for the holidays.Michael P.Huseby, president of Barnes & Noble
and CEO of Nook Media, said thecompany is committed to its devices, since standalone devices have ahigher
attachment rate than apps alone."Our primary focuscontinues to be on driving revenue growth
opportunities while managingexpenses and inventory commitment levels," for Nook, Huseby said in acall
with investors."To improve content sales, we are focused onincreasing sales to Nook active user base
and selling e-reading devicesthat are closely aligned with selling content."Net income for thethree
months ended Oct. 26 totaled $13.2 million, or 15 cents pershare. That compares with a loss of $501,000, or
7 cents per share, lastyear.Revenue fell 8 percent to $1.73 billion from $1.88 billionlast year. Analysts
expected a loss of 3 cents per share on revenue of$1.76 billion, according to FactSet.Revenue fell across
allsegments. Retail revenue fell nearly 8 percent to $921 million. Collegebookstore revenue fell 4.6 percent
to $737.5 million and Nook revenuedropped 32 percent to $108.7 million.Shares fell 99 cents to $15.44 during
midday trading. The stock is up 9 percent since the beginning of the year.Copyright 2013 The Associated
Press. All rightsreserved. This material may not be published, broadcast, rewritten orredistributed.

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