BELLEVUE, Wash. (AP) - In a story July 26 about Coinstar Inc.'s quarterly earnings results, The Associated Press reported that the company's full-year profit forecast of $4.60 to $4.90 per share fell short of analysts' average estimate of $4.97 per share. In fact, Coinstar's 2012 earnings guidance compared with a consensus estimate of $4.79, according to data provider FactSet.
A corrected version of the story is below:
Coinstar 2Q net up 38 pct; revenue miss hurts stock
Redbox owner Coinstar's 2Q profit up 38 pct but revenue growth disappoints, sinking stock
BELLEVUE, Wash. (AP) - Coinstar Inc., the owner of the Redbox DVD kiosks, said Thursday that second-quarter net income rose 38 percent as it expanded into Canada and strengthened its foothold in the U.S.
But the company's revenue growth missed expectations and its full-year revenue guidance also fell mostly below estimates, sending shares down sharply after hours.
For the April through June period, Coinstar earned $36.9 million, or $1.11 per share, up from $26.7 million, or 83 cents per share, a year earlier. Excluding acquisition fees and other items, earnings were $1.25 per share, topping analysts' average estimate of $1.18 per share according to FactSet.
Revenue rose 22 percent to $532.2 million from $435.2 million, driven by new Redbox kiosks, growth at existing locations and price increases put into effect last October. On a conference call with analysts, Chief Financial Officer J. Scott di Valerio said the growth was particularly strong given that customers had fewer new movie titles to choose from in the latest quarter, compared with the 2011 second quarter. The company said its DVD rental market share, on a unit basis, rose 8 percentage points year-over-year to 42.5 percent. Coinstar also said that its coin business was boosted by new kiosks that it's installed in Safeway supermarkets over the past year.
But the growth fell short of Wall Street's $546.8 million revenue estimate. The stock tumbled $7.49, or nearly 13 percent, to $51.73 in electronic trading after hours. It had closed down 5 cents at $59.22 before the report.
Looking ahead, Coinstar noted on its conference call that there are going to be 23 percent fewer DVD releases in the third quarter. For the full year, Coinstar raised its forecast, now expecting adjusted profit from continuing operations of $4.60 to $4.90 per share on revenue of $2.21 billion to $2.31 billion. That compared with analysts' $4.79-per-share average estimate and forecast for revenue of $2.29 billion.
Reflected in Coinstar's outlook are costs related to the $100 million acquisition of 6,200 DVR kiosks from NCR Corp., which closed in June. The Bellevue, Wash., company expects to replace nearly half the acquired kiosks this year with Redbox stands. It has said the deal will start adding to earnings next year.
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