Earnings Preview: Barnes & Noble 2Q results

NEW YORK -- Barnes & Noble Inc., the largest traditional U.S. bookseller, could provide an update on its recent deal with Microsoft as well as how well sales of e-books are doing when it reports its second-quarter earnings before the market opens on Tuesday.

WHAT TO WATCH FOR: Expect an update on Barnes & Noble's Nook business. The company has been investing heavily in its e-book reader and e-book library to offset tough competition from online retailers and discount stores. The New York company struck a deal in April with Microsoft Corp. Microsoft will invest $300 million to help create a subsidiary for Barnes & Noble's e-book and college textbook businesses, giving it a long-desired foothold that space. Microsoft receives a 17.6 percent stake in the venture.

WHY IT MATTERS: Barnes & Noble's sales of books and e-books can give a hint to how well the publishing industry is doing and how it is evolving.

WHAT'S EXPECTED: Analysts surveyed by FactSet expect a loss of 92 cents per share on revenue of $1.48 billion in the quarter ended in April.

LAST YEAR'S QUARTER: The company reported a net loss of $1.04 per share on revenue of $1.37 billion in the corresponding year-earlier quarter, which was its fiscal fourth quarter at the time. The company has since changed its calendar.