Blockbuster 3rd-Quarter Earnings Up 92%

Blockbuster Inc. said its earnings climbed 92% before special charges thanks mostly to its shift toward higher-profit DVD rentals.

Blockbuster previously disclosed a $356-million earnings charge in the third quarter, and an additional $50-million charge in the fourth quarter, to write down its videocassette stock as it moves more toward DVD rentals. The company said last month it was getting rid of 25% of its tape library to make way for DVDs.

Excluding the $356-million charge and goodwill amortization, Blockbuster said third-quarter 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 cents to 20 cents a share, according to research firm Thomson Financial/First Call.

Blockbuster said third-quarter revenue rose 6% to $1.26 billion, mainly due to a 4.7% increase in sales at stores open at least a year and the addition of 176 new stores since third quarter 2000.

With DVD profit margins about 10% better than those for videocassette rentals, Blockbuster expects that business to continue to drive revenue and profit. Blockbuster has 7,800 stores worldwide.

Chairman and Chief Executive John Antioco told analysts that he expects the firm to benefit from the uncertainty after the Sept. 11 attacks because it has encouraged consumers to stay home more.