Bookstore Earnings War: Borders Vs. Barnes & Noble (BGP, BKS, AMZN)

Today we’ll see earnings out of Borders Group, Inc. (NYSE: BGP). The estimates from First Call are $1.42 EPS on $1.34 billion in revenues.  Next quarter estimates are -$0.40 EPS on $759.44 million in revenues. Estimates for fiscal Jan-2009 are $0.54 EPS on $3.78 billion in revenues.  Analysts have an average price target north of $12.00.  Borders is trading up over 5% ahead of earnings at $7.35 and its 52-week trading range is $6.90 to $24.15.

Thursday we’ll see earnings out of Barnes & Noble, Inc. (NYSE: BKS). The estimates from First Call are $1.71 EPS on $1.85 billion in revenues.  Next quarter estimates are -$0.02 EPS on $1.18 billion in revenues. Estimates for fiscal Jan-2009 are $1.77 EPS on $5.55 billion in revenues.  Analysts have an average price target of $35.00. Barnes & Noble shares are down over 3% at $28.25 today and the 52-week trading range is $25.01 to $43.80.

Whatever the reports are, both stocks are much closer to lows than highs.  Book selling, magazines, and book accessories are all very economically sensitive.  Plus those used book stores are just too much of a steal to discount and and Amazon.com (NASDAQ: AMZN) is just extremely convenient.

Jon C. Ogg
March 19, 2008