Barnes & Noble's (NYSE: BKS) first-quarter results gave investors no reason to revise their negative feelings about big bricks-and-mortar booksellers. Not to be outdone, Borders Group (NYSE: BGP) shared bad news of its own. Read 'em and weep.

A tale of ongoing loss (and losses)
In its fiscal first quarter, Barnes & Noble swung to a net loss of $62.5 million, or $1.12 per share; it reported a profit of $12.3 million, or $0.21 per share, this time last year. This quarter's loss included an $0.11 per share pre-tax expense related to the bookseller's current legal issues and brewing proxy battle with major shareholder Ron Burkle.

Barnes & Noble's sales increased 21%, to $1.4 billion, with same-store sales falling 0.9%. The shift to the Internet continued: The company's online sales increased 42%, while bricks-and-mortar sales fell 2%. Of course, online sales still only make up a small percentage of Barnes & Noble's total revenue, so party hats are premature.

Barnes & Noble also cut its annual guidance; it now expects a net loss between $0.25 and $0.65 per share. Even subtracting out legal costs related to its looming proxy contest, the company still expects earnings for the year to be anywhere between flat and $0.40 per share.

If you glance at Barnes & Noble's balance sheet, you might notice that its cash reserves have plunged by a precipitous 83% in just one year, to a mere $27 million. That dwindling cash is just one more reason why Barnes & Noble looks ever riskier for investors.

This may be a dystopian future
Despite all that bad news, Barnes & Noble is emphasizing its push into digital books as a positive. True, its Nook e-reader device has had a major head start over rival Borders' e-reader, which launched this summer. Barnes & Noble also recently boasted that it has about 20% market share in the nascent e-books space; it now says that e-book sales are still accelerating.

Still, that's meager consolation when the rest of Barnes & Noble's business, which still represents the lion's share of revenue, faces tough competition, a rotten economy, and flagging consumer confidence. Barnes & Noble and Borders will have to compete aggressively with the likes of Amazon.com (Nasdaq: AMZN), Apple (Nasdaq: AAPL), and Sony in the e-book space, while discounters such as Wal-Mart (NYSE: WMT), Target (NYSE: TGT), and Costco (Nasdaq: COST) undercut them with bargain-basement prices on hardcover best-sellers.

Trauma drama
As if Barnes & Noble's tidings weren't bad enough, Borders announced yesterday that CFO Mark Bierley, a 12-year Borders veteran, is leaving. Bierley's presumably headed for greener pastures at another company. Not long ago, the beleaguered bookseller lost its new CEO after a tenure of less than a year.

Barnes & Noble and Borders remain dangerous stock ideas that investors should avoid. Borders is particularly risky, but Barnes & Noble has plenty of problems of its own. The latter bookseller is already on the auction block, as Chairman Leonard Riggio tries to rally allies for his own bid on the company. Meanwhile, the brewing battle over e-books pits bricks-and-mortar booksellers against a staggering selection of formidable, technologically superior enemies.

In short, Fools, there are far safer and more stable spots to stash your investing dollars.

Do you see a happier ending than I do for shares of Borders and Barnes & Noble? Pen your thoughts in the comment box below.

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Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy.