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To: Rob S. who wrote (26965)	11/19/1998 11:40:00 AM
From: H James Morris	Read Replies (1) \| Respond to of 164684

Rs,< New York, Nov. 19 (Bloomberg) -- Barnes & Noble Inc., the largest U.S. bookseller, reported a fiscal third-quarter loss, as operating losses at its fledgling Internet unit offset higher sales at its chain of superstores. Barnes & Noble reported a loss of $4.59 million, or 7 cents a share, compared with net income of $65,000, or break-even on a per-share basis, last year. Analysts expected a loss of only 3 cents a share, the average estimate of analysts polled by First Call Corp. The company also said it expects to record a pretax gain of $64 million, or 52 cents a share after taxes, on the sale of a 50 percent stake in the Internet unit, barnesandnoble.com, to Germany's Bertelsmann AG. The sale was completed last week, and it will take the gain in the fourth quarter, Barnes & Noble said. Costs associated with marketing and developing the barnesandnoble.com Web site have exceeded sales at the unit, which lost $12.1 million, or 18 cents a share, in the quarter. The Internet site's chief rival, Amazon.com Inc., has had similar problems. Barnes & Noble earlier this year lowered its online revenue projection to $65 million from $100 million, and analysts said they don't expect the site to be profitable before 2001. ''You can attribute the results to a black hole called the Internet,'' said analyst William Armstrong of Fahnestock & Co., who rates the stock a ''buy.'' Total revenue rose 9.6 percent to $674.1 million for the quarter ended Oct. 31, from $614.8 million. Sales from Barnes & Noble's superstores, which account for more than 82 percent of total revenue, rose 11 percent to $554 million. The retailer operates 504 superstores and 507 B. Dalton stores. Sales at Barnes & Noble stores open at least a year rose 4.5 percent, while at its B. Dalton chain they declined 1 percent. So- called same-store sales are a key measure of a retailer's business because they exclude new, remodeled or closed stores. Sales at barnesandnoble.com more than quadrupled to $17.2 million. It competes with the No. 1 online bookseller, Amazon, and Borders Group Inc., which launched a site in May. The shares of New York-based Barnes & Noble rose 2 1/8 to 34 3/4 in midmorning trading. >