Blockbuster Posts Loss; Revenue Rises

Blockbuster Inc. had a first-quarter loss because of investment declines. Revenue increased 1% on increased sales of used DVDs, VHS tapes and games.

Blockbuster’s loss was $1.75 billion, or $9.72 a share, compared with net income of $4.7 million, or 3 cents, a year earlier. Sales rose to $1.33 billion from $1.31 billion, the Dallas-based company said.

A new accounting rule forces companies to periodically review the value of acquisitions and record expenses if they’ve fallen. That resulted in $1.82 billion in costs in the quarter, Blockbuster said. Excluding those costs, the company said it would have earned $66 million, or 37 cents a share, more than analyst forecasts.

Blockbuster, which is 82% owned by Viacom Inc., was expected to report a profit of 28 cents a share, according to analysts polled by Thomson Financial/First Call.

Blockbuster is focusing more on renting DVDs because they provide a profit margin that’s 10 percentage points higher than renting videocassettes. DVD rentals in the first quarter rose 115%.