Blockbuster posts loss, extends debt pact

August 13, 2010 2:24 PM EDT

Blockbuster Inc posted a wider quarterly loss but said it had extended a debt-payment deadline to the end of September to give it time for recapitalization talks with debtors and strategic parties.

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Blockbuster, saddled with about $1 billion of debt, has struggled to compete in an evolving digital marketplace against competitors like Netflix Inc and its market share losses are accelerating at a faster rate than Blockbuster can diversify its revenue sources.

The embattled DVD rental company on Friday posted a second-quarter loss of $69 million, or 32 cents per share, compared with a loss of $37 million, or 21 cents a share, a year earlier.

Revenue fell to $788 million from $982 million in the same quarter the year before.

Blockbuster, which announced its delisting from the New York Stock Exchange in July, on Wednesday said it would not hold a conference call following the release of its earnings due to the complex nature of its recapitalization.

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In July, Blockbuster entered into a forbearance agreement with about 70 percent of its noteholders, and elected not to make a $42.4 million interest payment on bonds due July 2.

Analysts have said that a pre-packaged bankruptcy may be the company's best option.

(Reporting by Caroline Humer and Sinead Carew in New York, editing by Dave Zimmerman)