Blockbuster (NYSE: BBI) remains troubled. Just look at the second-quarter report that was released on Thursday after the bell. Net sales dropped over 20%, coming in at roughly $1 billion. The company lost 19 cents per share, one penny better than the loss reported in the year-ago period (to which I say, big deal!). According to the preview, the market wanted to see $1.1 billion for the top line and a loss of only 12 cents for the bottom line. A failure on both counts, I'm afraid.

Cash flow was the more attractive part of the Q2 story. The company calculated its free cash flow to be about $109 million. Okay, I'll give Blockbuster a good mark for having positive cash flow this year.

Blockbuster (NYSE: BBI), the troubled DVD-rental chain that competes with Netflix (NASDAQ: NFLX), reported earnings for the third quarter on Thursday. The top line decreased by a little under 3%, and the net loss per share was $0.08 on an adjusted basis, which was $0.07 better than expected. Okay, I suppose that's kind of cool from a certain angle. In fact, one analyst quoted in the piece had a good take on the company.

I, however, do not have a good take on Blockbuster. I am not bullish in the least. For one thing, it takes a lot to look past a net loss and say that there's something to the earnings story that goes beyond the bottom line. For another thing, the press release indicates that Blockbuster is not doing well in terms of cash flow. Management needed to use $18.2 million for operations during the third quarter, which was slightly more than the amount needed in last year's similar period. And as for free cash flow, that was negative $53.7 million in Q3 2008 versus negative $38.6 million in Q3 2007. This doesn't scream "Buy Blockbuster!", does it?

Another negative aspect to the story is that the gross margin went down by 70 basis points. I will give one bit of credit, however: same-store sales for domestic locations actually increased slightly over 5%, and worldwide comps expanded by almost 2%.

Blockbuster (NYSE: BBI) announced first-quarter earnings on Thursday, and while it beat the market's expectations, I can't say I'm terribly excited. Revenues decreased a little over 5% to $1.4 billion. Net income from continuing operations came in at $0.21 per diluted share. Briefing.com says that this performance was $0.06 better than Wall Street's average call. Revenues, however, missed expectations.

Why am I not excited about the performance here? I mean, not only did the bottom line trounce the wizards of Wall Street, but domestic comps increased 2.9%. Well, for one thing, the cash flow was nonexistent. Both operational and free cash-flow were negative; granted, the company used a lot less cash this time for operations, and the deficit in terms of free cash was much better, but still, I don't see any positive green.

Plus, there's just the general idea of Blockbuster itself. My feelings haven't changed since I last wrote about the movie-rental business and its earnings. I still believe that Netflix (NASDAQ: NFLX) and video-on-demand limit the upside potential of the company's long-term prospects (perhaps I shouldn't just say limit; maybe threaten is better terminology, who knows).