Barnes & Noble has reported earnings for its Q3 2013 (the three-month period ending Jan. 31) and they aren't good.

The company reported a loss of $0.18 per share on quarterly revenues of $2.2 billion: a drop of 8.8 percent from the same time last year. It also showed net losses of $6.1 million. Though analysts predicted revenues of $2.4 billion, revenues last quarter were only $1.9 billion.

Much of the blame may lie with the company's Nook tablet, which generated $316 million as opposed to $427 million last year. This is seen by many as paralleling the diminishing growth of the e-book market.

"After the hyper growth in the e-book market over the last few years, consumers have settled into their book formats of choice," says CEO William Lynch, "and while e-books will continue to drive growth in the book category in the future, physical book sales will have a longer tail ( longer life expectancy) than previously anticipated."

Rumors are swirling that Barnes & Noble may abandon the Nook, although the company denies them.

Aside from the Nook, Barnes & Noble's retail market is also suffering, as indicated by a recent hit during the holiday season. While the holidays are usually a time when retailers see a boost in sales, this year Barnes & Noble saw a 10.9 percent sales decrease for its stores and website. On Jan. 28 the company announced it will close nearly one third of its retail stores over the next decade, bringing its total number of stores down from 689 to between 450 and 500.

Still, Lynch announced that the company is making efforts to improve Nook sales and retains a positive message about the company's future.

"Coming off the holiday shortfall, we're in the process of making some adjustments to our strategy as we continue to pursue the exciting growth opportunities ahead for us in the consumer and digital education content markets," Lynch says.