Redbox Owner Posts Lower Revenue But Tops Wall Street View
April 28 2016 - 6:30PM
Dow Jones News
Outerwall Inc.'s Redbox kiosk reported another decline in movie
rentals last quarter, but it was offset by growth in its Coinstar
and electronics recycling kiosks.
Shares of Outerwall, down 42% over the past year, rose 8.5% to
$43.50 after hours as the company's total first-quarter revenue
topped analyst estimates.
Redbox rentals fell to about 137.7 million from 173 million. The
general decline in physical rentals has hurt Redbox results in
recent quarters. Additionally, a December 2014 price increase that
helped revenue and margins at first has been blamed for reducing
demand.
Outerwall also owns the Coinstar coin-counting business and
ecoATM, which provides kiosks for the sale of used phones, MP3
players and tablets.
In February, activist investment firm Engaged Capital LLC
disclosed a stake in Outerwall and urged the company to cease
virtually all investment and share repurchases, pay annual
dividends of $125 million, and begin a sale process.
In March, Outerwall said it would explore "strategic and
financial alternatives." Earlier this month, Outerwall said it
reached a "cooperation agreement" with Engaged that includes board
representation.
Outerwall said Thursday, "During the quarter, we continued to
reduce expenses, create efficiencies and optimize our kiosk
networks to improve profitability."
For the quarter March 31, Outerwall earned $38.5 million, or
$2.29 a share, compared with $35.6 million, or $1.87 a share, a
year earlier. An $11.8 million decrease in net interest expense,
partly because of a gain on early debt extinguishment, helped
results in the quarter.
Outerwall's total revenue fell to $536 million from $608.3
million but still beat the average analyst estimate of $508
million.
Revenue at the Redbox segment fell to $421.5 million from $519.5
million. Coinstar revenue rose 4.4% to $72.4 million, while revenue
at the ecoATM segment more than doubled to $42.1 million.
For 2016, Outerwall expects core earnings from continuing
operations of $5.35 to $6.55 a share. Analysts, on average, were
expecting earnings of $5.28 a share.
Write to Josh Beckerman at josh.beckerman@wsj.com
(END) Dow Jones Newswires
April 28, 2016 18:15 ET (22:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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