With every passing quarter, Barnes & Noble continues to deliver bad news from its Nook division. What started out as a promising digital alternative to the book store’s traditional business has ended up being a joke in the face of continued innovation from competitors like Amazon. With its latest earnings report, Barnes & Noble proves yet again that it should just jettison Nook already.

Barnes & Noble announced today that it brought in consolidated revenue of $2 billion in Q3, or a 10.3 percent decrease compared to Q3 last year. Things look a lot better for consolidated earnings as it brought in $173 million compared compared to last year’s $59 million. Barnes & Noble notes that last year’s Q3 earnings were impacted by a $74 million charge it took on unsold Nook inventory. By focusing on selling what it already had instead of introducing new hardware, Barnes & Noble was able to post the small amount of profit seen above.

“During the third quarter, the company significantly improved its balance sheet and bottom line, while making real progress on our strategic priorities,” said Michael P. Huseby, Chief Executive Officer of Barnes & Noble, Inc. “Retail’s core comparable store sales benefited from a strong title line-up, strong execution and an effective advertising campaign. College entered into the spring back-to-school rush and saw continued growth in its higher margin textbook rental business. This resulted in a slight EBITDA increase for College, even after funding and developing our digital educational applications. We expect the soft launch of our higher education digital product before the end of this fiscal year. NOOK losses narrowed significantly as we achieved our objective of selling through much of our pre-holiday device inventory, while managing promotions to optimize sales.”

Like always, Barnes & Noble’s best performing segment is its retail business. It notes that its retail business brought in $1.4 billion in revenue, a decrease of 6.3 percent from last year. This decrease in revenue is attributed to declining sales both in stores and online as well as store closings.

The College segment brought in revenues of $486 million, a six percent decrease from last year. Sales also saw a decrease thanks to a rise in textbook rentals and generally lower textbook sales. The company notes that it was able to offset the decline in textbook sales with higher sales of merchandise in its College stores.

Finally, Nook brought in revenues of $157 million in Q3, a 50.4 percent decrease from last year. Breaking that down, Barnes & Noble says devices and accessories brought in $100 million while digital content sales brought in the other $57 million. Both are down from last year thanks to a combination of “lower unit selling volume and lower average selling prices.”

Barnes & Noble notes that it focused last year’s holiday season on selling its existing stock of Nook devices instead of introducing new hardware. This helped the company avoid a massive charge on unsold stock which led to Barnes & Noble only taking a $62 million loss instead of last year’s $191 million loss as a result of the aforementioned inventory charge.

Even if the losses aren’t as dramatic, Nook is still losing money. Barnes & Noble will surely one day listen to reason and just get rid of Nook, right? Right?

“We have taken steps to reduce costs and device exposure, while focusing our efforts to reverse the content sales decline,” continued Michael P. Huseby. “We remain committed to delivering world-class reading experiences to our customers through our reading centric e-Ink and color reading devices. The Company is actively engaged in discussions with several world-class hardware partners related to device development as well as content packaging and distribution. As a result, we plan to launch a new NOOK color device in early fiscal 2015.”

There you have it folks, Barnes & Noble will continue its quest to find an audience for Nook. With the right amount of innovation and content offerings, Nook could be competitive yet again. Allow me to remain skeptical though as Nook is beginning to look an awful lot like the BlackBerry of tablets.

Image via Wikimedia Commons