Can Barnes & Noble Count on the Nook?

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Nook HD+Barnes & Noble’s (NYSE:BKS) business is changing, and as a result, some pain has accompanied the company’s transition from a brick-and-mortar bookseller to e-book seller. Released before the markets opened on Thursday, the company’s second-quarter results showed how competition and the rising popularity of mobile devices have affected its earnings.

How Did Barnes & Noble Fair in the Second Quarter?

Barnes & Noble reported poor results in both its key operations. According to Reuters, “sales growth in its core bookselling business slowed in the quarter and declined over the Thanksgiving weekend, as the benefits from last year’s liquidation of rival Borders Group waned.” Furthermore, the Nook division’s quarterly loss increased as the company boosted development and marketing spending on its tablets in order to compete with Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL).

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As Reuters reported, the Nook is an important driver of revenue. Despite the heavy costs associate with the division, the company’s earnings report indicated that its tablets are becoming more popular. For the three-month period ended October 27, revenue for the Nook division rose 6 percent, and sales of digital books, newspapers, and applications increased by 38 percent. However, these results do not include sales from the new Nook HD and Nook HD+ tablets because they were launched after the quarter ended.

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