Redbox Sets Record With 199.5 Million Rentals During the Quarter
Shares of the company's parent company, Outerwall, were climbing 8 percent after the closing bell.
After previously warning of weakness at Redbox, the company's parent company, Outerwall, said Thursday that the DVD-kiosk business "improved substantially" during the last few weeks of the quarter.
News of the improvement, coupled with quarterly earnings announced Thursday that exceeded expectations, had shares of Outerwall advancing 8 percent after the closing bell.
Outerwall shares closed up fractionally during the regular session Thursday to $61.98.
Outerwall said that revenue at Redbox had been pressured during the quarter because of promotional discounts, but the company "recalibrated" its marketing strategy in order to fix the problem.
Overall revenue at Outerwall, which includes its coin-counting business and other ventures, increased 9 percent to $587.4 million, though Redbox revenue was up just 7 percent to $491.7 million.
Net income for Outerwall in the third quarter was $82.7 million, up from $36.8 million a year ago.
On Thursday, Outerwall said Redbox generated 199.5 million rentals during the quarter, 13 percent more than a year earlier and the most in any quarter of Redbox's 11-year history.
Net revenue per rental of DVD and Blu-ray discs as well as video games fell from $2.52 a year ago to $2.46, reflecting promotional activity and increased single-night rentals during the quarter, the company said.
Last month, Outerwall announced that Redbox set a rental record in July, but that quarterly revenue and profit would fall short of expectations. The announcement caused the stock to tumble 21 percent after the closing bell that day, though stock has been steadily climbing ever since.
In This Week's Magazine
