Barnes & Noble (BKS) Plunges, Suspends Dividend as Cash Shrinks

Barnes & Noble Inc (NYSE:BKS) suspended its dividend to preserve its dwindling cash and declined to give a sales forecast for the current quarter, sending its shares down 8 percent.

Barnes & Noble, which put itself up for sale last summer, reported a lower-than-expected profit for the holiday quarter despite a sales increase as the top U.S. bookstore chain continued to invest in developing its e-books strategy, led by its Nook e-reader.

The company said it had $26.5 million in cash and cash equivalents on hand as of January 29, down from $40.2 million a year earlier.

Barnes & Noble suggested that going-out-of-business sales by rival Borders Group (OTC:BG) could pressure its results in the short term, prompting its decision not to forecast sales and profits for the current quarter.

Borders filed for Chapter 11 bankruptcy protection last week and said it would close at least 40 percent of its 500 superstores.

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