Blockbuster's loss bigger than analysts expected

Blockbuster Inc, the largest US movie-rental chain, said it lost more in 2009 than analysts estimated after holiday sales came in “well below expectations.” The shares sank in late US trading. Earnings before interest, taxes, depreciation and amortization will be $195m to $205m for the year ended January 3, the Dallas-based company said today in a statement. Analysts projected $245.4m, the average of five estimates in a Bloomberg survey. Blockbuster estimated a net loss of $183m to $193m, compared with analysts’ predictions of a loss of $100.8m. Led by Chairman and Chief Executive Officer Jim Keyes, Blockbuster increased inventory and spent on advertising to drive customers to stores and online over the holidays. Those efforts fell short, with fourth-quarter results missing projections especially in December when the retailer typically generates as much as 30 percent of annual Ebitda, according to the statement. Blockbuster said it plans to further reduce costs this year. The company has been hurt by Netflix Inc, which rents movies by mail, and Coinstar Inc, operator of Redbox kiosks that dispense DVDs in supermarkets and other retail outlets.