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Barnes & Noble missed Wall Street expectations with its fiscal third-quarter results on Tuesday, but at least it had some positive news on deck. Not only did the company announce the $199 8GB Nook Tablet, but also its overall Nook business is up almost 40 percent from a year ago.

The company is in the midst of transforming itself from a brick-and-mortar bookseller to one supported by hardware and digital sales. The big question on investor and consumer minds is if the company can survive in the long-term with incredibly strong competition from Amazon on all fronts. Amazon’s price-busting $199 Kindle Fire is the reason Barnes & Noble launched the $199 Nook Tablet, and it will remain the primary competition for the foreseeable future.

Barnes & Noble reported that revenues were up 5 percent against the year-ago quarter. Net income ended up at $52 million, which is flat from last year’s earnings. Third quarter earnings per share ended up at $0.71 a share. Analysts had predicted $1.01 per share.

The biggest positive of the report was that the total Nook business revenues were up 38 percent year-over-year to $542 million. Nook hardware sales, including the Simple Touch, Color and Tablet, increased 64 percent year-over-year. Digital content sales, including digital books, digital newsstand, and apps, increased a massive 85 percent against the year-ago quarter.

While the news was decidedly mixed, investors did not appear to be shaken in early trading Tuesday. Barnes & Noble’s share price on the NYSE was slightly higher at $13.24 per share, a 1 percent gain for the day, as of this writing.

Barnes & Noble store photo: Brokentaco/Flickr

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