NEW YORK (AP) - Barnes & Noble Inc., the largest US bookstore chain, said yesterday its second-quarter profit fell 27 percent, but results beat analyst expectations as the company cut costs.

Profit for the three months ended August 1 fell to $12.3 million, or 21 cents per share, from $16.8 million, or 27 cents per share last year.

Excluding a benefit from an insurance settlement, net income was 14 cents per share. Analysts expected nine cents per share and the company had predicted a range of five cents to 15 cents per share.

Selling and administrative expenses fell four percent during the quarter to $288.7 million.

Revenue fell five percent to $1.16 billion, matching analyst expectations. Sales in stores open at least one year - so-called same-store sales - fell 6.9 percent during the quarter.

Barnes & Noble and other booksellers have faced falling sales for some time as shoppers turn to online and discount booksellers.

The recession has compounded the problem, with consumers severely limiting spending on discretionary items like books and music.

CEO Steve Riggio said the decline in retail traffic continues to hurt revenue but noted that online traffic increased slightly from a year ago.

Best sellers during the quarter included "Finger Lickin' Fifteen" by Janet Evanovich, "The Help" by Kathryn Stockett, "The Defector" by Daniel Silva, "Twenties Girl" by Sophie Kinsella and "Catastrophe" by Dick Morris.

The New York company expects same-store sales to fall one percent to three percent during in the third quarter and three percent to five percent for the year.