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BLOCKBUSTER REPORTS PROFITS, AMAZON LOSS SHRINKS, EARTHLINK NET LOSS WIDENS
The Economy Is Looking Up For Some, Down For Others
Blockbuster, a company that has been known to rent a video or two, reported a 92% rise in third-quarter earnings before special items.

The rise was primarily driven by the hot DVD market. And by that we mean that the market is hot, not necessarily that Blockbuster was trafficking in "hot" DVDs or DVDs with "hot" adult content.

The company said it expects DVDs, whose margins are about 10% higher than videocassettes', to drive revenues and gross margins in the fourth quarter.

Shares of the company, a unit of media conglomerate Viacom, were up 7 cents at $24.57 in afternoon New York Stock Exchange trade.

Blockbuster had said previously that it would take charges of $356 million in the third quarter and $50 million in the fourth quarter to write down its videocassette stock. Excluding the $356 million charge and goodwill amortization, Blockbuster said 3Q earnings rose to $43.4 million, or 24 cents a share, from $22.6 million, or 13 cents a share, a year earlier. The latest results exceeded analysts' estimates, which ranged from 17 to 20 cents a share.

With the charges and amortization, Blockbuster's net loss widened sharply to $224.9 million, or $1.28 per share, from $19.3 million, or 11 cents per share, a year earlier.

Meanwhile, Amazon.com said its quarterly pro forma loss shrank as the online retailer met estimates and made progress toward its first profit. The company said for its third quarter, it turned a pro forma net loss of $58 million, or 16 cents a share, compared with a loss of $89 million, or 25 cents a year earlier. The company was expected to lose between 13 cents and 18 cents a share. Revenues for the company were $639 million, well within Wall Street estimates of $624 million-$663 million.

Sales for the crucial holiday quarter were expected to be between $970 million and $1.07 billion, up 10% from last year's fourth quarter.

Including various costs like acquisition charges and effects of employee stock options, the company posted a net loss of $169.8 million, or 46 cents a share, less than the $240.5 million or 68 cents a share a year earlier. Shares in Amazon fell 35 cents to $9.20 in after-hours trading. The stock fell sharply in the days after the Sept. 11 attack, hitting a 12-month low of $5.51, but has since rebounded to levels of more than $8. However, it is still off a year high of more than $40, falling more than 40% over the past three months.

Meanwhile, Earthlink's third-quarter net loss widened on merger-related costs, with the stock down $2.37 or 13.7%. The company reported a third-quarter net loss of $84.4 million, or 62 cents a share, compared with a year-earlier loss of $80.6 million, or 65 cents a share, when there were fewer outstanding shares. Excluding the costs and other items, its loss narrowed to $22.7 million, or 17 cents a share, from $41.3 million, or 33 cents a share, a year earlier. Wall Street expected a loss of 19 cents per share.

For the fourth quarter, Earthlink said it expects revenues of $330 million to $335 million and a loss before merger-related costs of  8-11 cents a share. The company said it sees fourth quarter EBITDA in the range of $7 million to $12 million.

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