Shares of Redbox Parent Surge on Strong Earnings

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Outerwall reported better-than-expected quarterly profit

Shares of Outerwall were climbing 7 percent in after-hours trading on Thursday after the parent of the Redbox movie-rental service reported declining though better-than-expected quarterly financial results.

Revenue fell to $552.9 million from $586.6 million a year ago and net income was $17.9 million compared with $82.7 million last year. The bottom line was better than analysts had predicted, while the top line was in line with expectations.

The company operates automated retail kiosks and coin-counting machines, but its biggest segment is Redbox, which accounted for $438 million in revenue, down from $492 million.

While revenue declined overall, on a per-rental basis it was up 3.3 percent to $2.54 as a higher percentage of customers rented Blu-ray discs and video games.

"Our studio relationships remain strong. We signed a new agreement with Lionsgate and extended our existing agreement with Universal Studios," Outerwall CEO Scott Di Valerio said Thursday.

Redbox said a few days ago that it had withdrawn as a member of the joint venture streaming service known as Redbox by Verizon. As part of the agreement, Redbox received a cash payment of $16.8 million. Over the life of the joint venture, it received $70.5 million.

 

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