Movie Gallery Stumbles

Shares of Movie Gallery plunged to a new low after the Dothan-based company announced it won't pay a dividend for this quarter and will instead focus on reducing debt and monitoring its working capital.

The company's shares have been slipping since June and are down about 39 percent since the start of this year.

A major brokerage firm says Movie Gallery's mode of operation is not in step with fundamental changes in the way people are watching movies at home.

The video-rental industry has been in decline since 2002, as more Americans have moved toward buying DVDs, video-on-demand and online DVD rentals from companies like Netflix.

Movie Gallery's earnings were forecasted at a target price of 87 cents a share, well below the Wall Street consensus of $2.82 a share.

A Movie Gallery spokesman declined to comment on the company's stock.