Blockbuster (BBI) Reports First Quarter 2010 Financial Results

Blockbuster rallied hugely during the trading day today, as rubes investors hoped that "Blockbuster posts a surprise" when earnings came out after hours. Sold to them!

And it turns out: Earnings just came in and they are not so good.

Revenue for Q1 2010 was $939.4 million, versus $1.09 billion the year earlier (down 14%). [The decrease was] primarily attributable to a 7.1% decrease in worldwide same-store comparables...

Ouch! Those are big revenue declines! Isn't it interesting that the Credit Bubble Stocks short portfolio companies are reporting first quarter results that are worse than comparable 2009 results? Doesn't it make you wonder about the "recovery"?

Operating loss for Q1 2010 was $29.4 million, compared to $50.2 million the year earlier. Adjusted EBITDA for Q1 2010 (which excludes stock-based compensation expenses, costs associated with lease terminations, severance, and professional fees related to the Company’s recapitalization initiatives) was $31.1 million compared to adjusted EBITDA of $97.2 million the year earlier.

Much lower EBITDA. That really hurts projected enterprise valuations, which is bad for the equity because of the negotiations going on right now between different parts of the capital structure. Speaking of which:

“During the first quarter we continued progress to recapitalize our business.  We have had encouraging discussions with both financial and strategic partners and expect to have additional details to report by our annual stockholders’ meeting in late June,” stated Jim Keyes, Chairman and Chief Executive Officer...

A very vague statement. Almost certainly they are working on some kind of distressed debt exchange.