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Coinstar Shares -10.5% In After-Hours Trading As Redbox President Mitch Lowe Leaves For “Other Interests”

Coinstar shares are down nearly 10.5% in after-hours trading as the company coupled this surprising announcement with an early release of financial data that’s lower than Wall Street expected. The owner of the Redbox $1-a-night DVD rental kiosks says that next week it will report 2Q revenues of between $434M and $436M — below the $445.9M average forecast by analysts. Coinstar adds that earnings in the third quarter will be higher than in the fourth because the year will end with lots of DVD releases ”by studios that generate lower margins for the company.” The company also said that it has borrowed $450M in senior secured credit to repay $150M in existing debt and provide working capital.

The announcements will jolt investors who have been regaining their confidence in Coinstar after its shares plummeted 30% in January. The company startled the Street by disclosing that its financials would fall far short of its guidance. Coinstar was grappling inventory issues as several studios delayed providing DVDs to Redbox until 28 days after they were available elsewhere. Also, Redbox was slow to integrate Blu-ray discs into its kiosks. But lately Redbox seemed to be in the catbird’s seat. Blockbuster’s kiosk business is on the ropes following the chain’s bankruptcy and acquisition by Dish Network; this month NCR, which makes the machines, said it may sell the unit. And Netflix angered a lot of consumers with the recent 60% price hike for its combination DVD rental and broadband streaming … Read More »

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Redbox Starts Renting $1.50 Blu-ray Discs

By | Thursday July 29, 2010 @ 1:26pm PDT

Coinstar’s Redbox announced today it has started rolling out Blu-ray titles with availability at approximately 13,300 DVD rental kiosks nationwide.  Redbox will rent Blu-ray Discs at $1.50 per night plus tax and the company expects to have availability across its network of approximately 23,000 kiosk locations by the fall.

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