Lacking any lyrical blockbusters, one of the world's largest music distributors warned investors that its fourth-quarter results would not earn it a Grammy.

Handleman (NYSE:HDL), which distributes music to retailers, said this week that without any artists bursting onto the scene the way Norah Jones did in recent years (who actually buys that stuff anyway?), or an Usher causing women to swoon, revenues and profits would be lackluster. And the coming fiscal year wasn't going to be a star-studded extravaganza, either.

The company has had its share of problems over the years, including financial restatements, Securities and Exchange Commission investigations, criminal charges against former executives, and the loss of significant business from Kmart -- now Sears Holdings (NASDAQ:SHLD) -- which caused a $51 million drop in sales. At one time, the discount retailer amounted to 27% of Handleman's revenues, but it now accounts for less than 5% of sales. Wal-Mart (NYSE:WMT) is now its biggest source of revenues, totaling more than half, and at one time the duo had accounted for 85% of Handleman's sales. While Handleman has managed to put most of these issues behind it, it has had a rough time gaining traction and is still looking for a messiah.

In February, the company boosted guidance for 2005, saying that with merchants growing sales and increasing market share, earnings expectations were now $1.63 a share instead of $1.52. Turns out that was perhaps a little too exuberant, as it just announced that fully diluted earnings were going to be $1.51 to $1.53 per share after all. Handleman also warned investors not to expect much from first-quarter results either, as that is typically its slowest period, while the full year's sales and profits will be flat.

Though the company trades at a price-to-earnings ratio of just 10 and at a forward multiple of about 8.5, both significantly lower than the average of about 15 for each multiple, Handleman doesn't have the same revenue prospects it once did, having lost a major retailer for its music. For the quarter ended in January, inventories had been piling up and receivables had been growing year over year -- up 11.7% and 11.5%, respectively -- as sales had climbed an anemic 3.5%. That sales will drop more than 8% for the current quarter doesn't bode well and helps explain why investors swiped 10% off the stock yesterday and almost another 5% today during midday trading.

The fall in share price, though, should help the company repurchase its shares. In February 2003, Handleman authorized a program to buy back about 20% of its shares. A little controversy arose from that plan -- it was suspended during negotiations over a buyout -- but it was reinstituted later that year when the talks fell through (and shareholders complained), but was about 92% complete by February of this year. So the company authorized a new buyback plan to acquire another 15% of the 21.8 million outstanding shares.

While buybacks are nice, and help increase shareholder value, certainly growing sales would be sweeter music to investors' ears.

Fool contributor Rich Duprey is tone deaf and does not own any of the stocks mentioned in the article. The Fool has a disclosure policy.