Redbox's Parent Company Sees 10 Percent Stock Decline on Quarterly Earnings
Redbox saw its revenue fall as the company raised the price of its DVD and video game rentals.
Shares of Outerwall dropped 10 percent in after-hours trading on Thursday after the owner of the Redbox DVD business posted quarterly revenue of $545.4 million, about $35 million less than what Wall Street had predicted.
The company also said Thursday it has named Erik Prusch its new CEO, and he'll replace interim CEO Nora Denzel beginning Friday. Prusch is a former CEO of Clearwire, a U.S. provider of 4G wireless broadband services acquired in 2013 by Sprint.
On the earnings front, while revenue was down only about $1 million year-over-year, the company posted a $45.6 million loss as opposed to a $21.8 million profit last year. The loss was related to an $85.9 million charge related to ecoATM, a business that lets users sell their old cellphones and other electronic devices at kiosks.
Redbox revenue in the second quarter was $439 million, down from $443 million a year ago as the company raised its prices and suffered a 13 percent decline in DVD and video game rentals to 146 million units during the quarter. Redbox scored $3 in revenue for each rental, up from $2.63 a year ago.
Shares of Outerwall rose $1.03 to $81.82 Thursday but shed nearly $8 after the closing bell.
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