Redbox Parent Coinstar Shares Drop as Company Offers Disappointing Guidance
Coinstar shares were dropping as much as 7 percent after the closing bell after the parent of Redbox reported mixed quarterly earnings and guidance that fell short of Wall Street's expectations.
Separately on Thursday, Redbox said it struck a deal with Warner Bros. that will make the studio's DVDs available for rental in Redbox kiosks 28 days after their retail release, down from a 56-day restriction that has been in place since January. Redbox, though, hadn't been adhering to the 56 days and instead was acquiring Warner Bros.' titles through alternative means.
Coinstar reported revenue of $537.6 million, up from $465.6 million in the year-ago quater, and net income of $36.8 million, down from the $37.1 million it recorded last year.
The company's primary businesses consists of a coin-counting service and Redbox movie rentals, and the latter has been dominant, accounting for $459.5 million of the company's overall revenue this quarter.
"Redbox revenue increased 18 percent despite temporary headwinds from the new release schedule and Olympics that negatively impacted rentals," Coinstar CEO Paul Davis said.
Redbox is expanding in the U.S., as well as working on new ventures like Redbox Instant by Verizon and Redbox Tickets, the latter being a service for selling tickets to concerts and other live events for a a fee of $1 per ticket, Davis said.
For the fourth quarter, Coinstar said it will earn as much as 77 cents per share on as much as $602 million in revenue. That's more than Wall Street analysts expected in revenue, but well shy of the $1.05 earnings per share they were anticipating.
The stock fell 64 cents to $43.23 during the regular session and was off close to $3 in the after-hours session.