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Redbox Owner’s Shares Rise After It Reports Strong Q4 Results And A Buyback

By | Thursday February 6, 2014 @ 1:48pm PST

Outerwall (yes, that’s the company’s name) also announced a new president for Redbox: Mark Horak, who’ll move from Warner Bros Home Entertainment on March 17 to run the DVD kiosk company. RedboxBut the financial disclosures are probably most responsible for the 10%+ jump in Outerwall’s share price in post market trading. Net income at $22.7M was down 1% vs last year, on revenues of $593.7M, +5.4%. The revenue number was slightly below analyst forecasts for $596.1M. But diluted earnings from continuing operations at $1.55 a share beat predictions for $1.22. The results show, though, that Redbox is feeling its age. It contributed $496.4M to revenues, +1.7%. Operating income at $111.3M was +39.2% — but that included $7M from an accounting change that’s “expected to reverse in the first quarter of 2014,” the company says. Redbox had 192M rentals in the quarter, +2.2%, with revenue per kiosk +2.1%. Sales at kiosks open at least a year was up 0.9%. Blu-ray discs accounted for 14.2% of rentals and 16.3% of revenue and October rentals were weak and December “did not perform as well as we expected” — partly due to a later than usual Thanksgiving — the company says. But November was “an exceptional month” helped by White House Down and Grown-Ups 2. Video games accounted for 2.7% of rentals, a slight pull back from last year’s 3%. Outwall’s board increased the stock repurchase authorization to $500M, bringing the … Read More »

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Shares In Redbox Parent Rise After Jana Partners Discloses Shake-Up Plans

By | Monday October 7, 2013 @ 7:22am PDT

Outerwall‘s stock price is up about 8% this morning, the first trading day after the activist investor group disclosed it bought 3.8M shares — about 13.5% of the total – and wants the owner of the Redbox DVD rental kiosks to begin “a review of strategic alternatives” that could include a sale or breakup. Now the company’s largest shareholder, Jana Partners said in an SEC filing that Outerwall’s stock is “undervalued” and it wants management to consider “a strategic transaction, selling or discontinuing certain businesses, or pursuing a sale” of the company to provide “a significant return of capital to shareholders.” Jana also said it wants to talk to management about “other topics including management and board composition, strategy and future plans.” Outerwall — formerly known as Coinstar — has been on the defensive since it disclosed last month that Q3 earnings will fall short of expectations. One problem is that Redbox is “mature, making investment in the company difficult for growth investors,” Wedbush Securities analyst Michael Pachter says. But B. Riley’s Eric Wold says this morning that Jana’s interest in Outerwall could highlight “long-term opportunities that still remain with physical rentals” many of which have been “unrecognized and undervalued by investors.” Read More »

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Redbox Owner’s Shares Plummet After It Reports Disappointing Summer Sales

By | Monday September 16, 2013 @ 2:07pm PDT

Stock prices for kiosk company Outerwall are down more than 20% in post-market trading after it lowered its financial projections for the year noting in a release that promotion discounts in July and August “drove consumers toward more single night [DVD] rentals.” As a result, the net revenue per rental in Q3 likely will fall as much as 9 cents vs last year. The company, formerly known as Coinstar, also says that it may see 6.5M fewer rentals than it expected in Q4 “as the number of titles has shifted to either later in the fourth quarter or into 2014.” The number of shifts “is greater than normal.” The Redbox owner had high hopes for Q3: Last year the company struggled to compete with the Summer Olympics, and the number of customers is up 5% in the first half of 2013 vs the period last year. Indeed, CEO J. Scott Di Valerio says that “both rentals and revenue for Redbox increased significantly in July and August” — even though they ultimately “were not to our expectations.” He vows to cut the number of consumer promotions, reduce content and operating costs, and repurchase an additional $100M of Outerwall shares in Q4. The company dropped the top of its Q3 revenue projection, made in July, by 6.5% to $589M with earnings per share down 37.8% to a maximum of 94 cents. For the full year, revenues are now projected … Read More »

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Is Redbox’s Impact On Video Rentals About To Peak?

By | Friday July 26, 2013 @ 1:04pm PDT

A lot of people are asking that question today after the company behind the DVD rental kiosks reported disappointing results for Q2. Shares of Outerwall (formerly Coinstar) closed down 13.2% after it said that Redbox revenues increased just 4% compared with the same period last year — even though the total number of kiosks was up 13%. Redbox came up short as bargain-hunters took advantage of promotions and only kept discs out for one night, resulting in a 9.9% decline in average revenue per kiosk. (DVDs go for $1.20 a night with Blu-ray discs $1.50.) The company also cut its forecast for the number of kiosks it will add this year while the experiment to sell sports and entertainment tickets at the kiosks “did not meet expectations”, CEO J. Scott Di Valerio told analysts. These developments will “accentuate concerns that the DVD rental market is quickly approaching saturation, and we believe that this is probably true”, says Wedbush Securities’ Michael Pachter. He also has soured on the Redbox Instant By Verizon streaming joint venture, saying the rollout “is moving at a very slow pace” and “revenues and profitability remain elusive.” Read More »

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Coinstar Shares Jump On Higher Than Expected Q1 Earnings

By | Thursday April 25, 2013 @ 1:15pm PDT

The stock is up more than 5% in after-market trading following the earnings report — plus an announcement that the company behind the Redbox kiosks plans to change its name to Outerwall. Whatever it’s called, it reported Q1 net income of $22.6M, -57.9% vs the period last year, on revenue of $574.7M, +1.1%. The revenue number is short of the $579.4 that analysts expected. But core earnings per share, factoring out one-time gains and losses, came to 93 cents — well ahead of the 86 cents the Street anticipated. The Redbox disc rental kiosk unit generated $92.7M in operating income (-15.3%) on revenue of $507.9M (+1%). The slight top-line growth was mostly due to the additional kiosks in the field. Profits took a hit as a result of “an increase in product costs related to higher DVD content purchases” — including increased buys from Warner Bros resulting from the deal they struck late last year. Coinstar says that “the physical market is stabilizing following further Blockbuster store closings and Netflix’s continued efforts to shift their disc customers to streaming.” Meanwhile, Blu-ray disc rentals “exceeded our expectations” and represented 14.2% of Redbox revenue, and 12% of total rentals. The company expects the HD discs to account for as much as 16% of Redbox revenue in Q2. CEO J. Scott Di Valerio says that the “continued growth in Redbox market share shows our ability to win with consumers.” Read More »

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