Barnes & Noble (BKS) halved its second-quarter loss despite slightly lower sales, as strong demand for its Nook e-book and tablet helped offset a decline in paperbacks.

The bookseller said on Thursday it posted a net loss of $6.56 million, or 17 cents a share, compared with a year-earlier loss of $12.5 million, or 22 cents. The results missed average analyst estimates of a 3-cent profit.

Revenue for the three months ended Oct. 29 was $1.89 billion, down slightly from $1.9 billion a year ago, missing the Street’s view of 1.98 billion.

Sales at its retail stores were down 1% to $918 million, hurt by a decline in physical book sales that was partially offset by increases in Nook products, and a 4% drop in textbook sales.

Offsetting the declines was a 17% increase over 2010 of BN.com sales to $206 million, with comparable sales up 38% on top of a 59% gain last year. Barnes & Noble attributed the sharp growth to sales of digital content and purchases of its new Nook tablet.

The company continues to expect to sell “millions of devices” during the third quarter.

“This growing base of customers buying digital content from Barnes & Noble will continue to position us as one of the fastest growing companies in this exploding digital content market, and we project this will generate significant returns on our investments for years to come,” the company’s chief officer William Lynch said.

Over Black Friday weekend, the retailer saw comparable sales climb 10.9% on a comparable basis. Lynch said based on early sales and traffic results, the company is encouraged by prospects for this holiday season.

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