US book retailer Barnes and Noble sank the most in 17 months after posting a loss that was twice as wide as analysts estimated and said it would stop making tablets as the digital unit's sales plummet.

The shares declined 20 per cent to $15.03 at 1.23pm in New York, and earlier slid as much as 21 per cent for the largest intraday drop since January 5th, 2012.

Barnes and Noble has been trying to navigate the shift by readers away from paper books with its Nook brand of tablets and e-readers.

After some early success growth stalled and the drop continued last quarter with revenue from the unit sinking 34 per cent to $108 million.

The division’s loss before interest, taxes, depreciation and amortisation widened to $177 million from $77 million a year ago. – Bloomberg