Port, you might remember some people on this board saying Divx would replace the CCUR model of VOD. As of today, DIVX is dead. One down, several more to go.
Wednesday June 16, 8:26 am Eastern Time
Circuit City posts loss after dropping DIVX
NEW YORK, June 16 (Reuters) - U.S. electronics retailer Circuit City Stores Inc. (NYSE:CC - news) said on Wednesday that it posted a first quarter loss of $88.8 million after a charge from its decision to discontinue its unprofitable DIVX standard DVD player.
Circuit City Group, the publicly traded electronics division, topped analysts' forecasts of 25 cents a share with profits of $39.3 million or 41 cents a share on a 15 percent increase in sales to $2.20 billion. After the $130.2 million or $1.28 a share charge from DIVX, the Richmond, Va.-based company reported a loss of $88.8 million or 87 cents a diluted share.
Circuit City Group, which plans a two-for-one stock split next month, reported sales of $1.9 billion and net income of $13.3 million or 13 cents a share in the quarter ended May 31, 1998.
DIVX was billed as an alternative to video rentals by letting customers rent its format of digital video discs (DVD) without having to return them to stores. However, the format did not get much support from film studios or other electronics retailers, leading to losses.
Circuit City is offering DIVX customers rebates and it is cutting prices on DIVX discs, it said.
At Circuit City's Carmax Group (NYSE:KMX - news) division, the car dealer's first quarter profits totaled $2.7 million or three cents a share on sales of $486.1 million, compared with a loss of $3.2 million or three cents a share on sales of $346.4 million.
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