Barnes & Noble Earnings Preview

Concerns over market share losses will likely be the focus on next week’s earnings call. Barnes & Noble is scheduled to report their fiscal fourth quarter 2010 results after the market closes on Monday, June 28.

Analysts have been speculating for weeks that the launch of Apple’s (AAPL: 494.07 +0.18%) iPad could result in significant market share losses for other e-readers. Barnes & Noble (BKS: 12.9697 -3.14%) seemed to confirm that fear yesterday when they cut the price of their Nook e-reader to $199. Amazon (AMZN: 185.33 +0.19%) quickly followed by lowering the price of its Kindle e-reader to $189 from $259. Today Apple announced that they have now sold 3 million iPads.

Last quarter, Barnes & Noble reported earnings results that were $.04 above Wall Street’s consensus estimates. BKS shares plunged 6.0% after the book retailer gave disappointing guidance for the rest of the year.

The current Wall Street consensus estimates are for revenues of $1.28 billion and EPS of ($.81). This would imply a 16% increase in revenues over last year’s $1.11 billion. However, losses are Barnes & Noble are expected to increase from last year’s ($.04) per share.

In 2010, Barnes & Noble’s shares have fallen 15% and have underperformed the flat performance of the S&P 500 index. Last year, BKS shares gained 27% and just outperformed the 24% gain in the Nasdaq.

Barnes & Noble stock is currently trading at 20x consensus 2012 EPS estimates. If a reduced Nook price point fails to stem market share losses, BKS shares look set to tumble further in 2010.