Redbox parent company's stock slumps again
The woes aren't over for DVD kiosk company Redbox and its corporate parent.
Redbox owner Coinstar Inc. saw its stock slump 9% in after-hours trading Thursday after reporting weaker than expected guidance for the current fiscal quarter.
Results for the previous quarter ended Dec. 31 were also weaker than originally predicted, as Coinstar warned its investors Jan. 14. Due to a slump in demand from a new 28-day delay on new releases from three studios, revenue for Redbox was weaker than the company first told investors it would be.
For the quarter, Coinstar reported $11.7 million of net income on revenue of $391 million, in line with the company's recently revised guidance.
In a statement, Chief Executive Paul Davis said, "We have taken definitive steps to correct the issues we encountered with our Redbox business in the fourth quarter and will be tracking [its] progress closely."
Although $1-per-night DVD rentals from Redbox kiosks didn't grow as fast as Coinstar and its investors had hoped, they were still up substantially. Redbox revenue grew 38% to $319.6 million in the quarter, compared with a year ago.
For the current quarter, Coinstar told investors it would generate between $400 million and $420 million of revenue and earnings of between 15 cents and 25 cents per share.
The company didn't provide any further information on its previously discussed plans to work with a partner to launch a digital distribution service.
Before financial results were released, Coinstar stock closed up 3% at $44.24 Thursday.
-- Ben Fritz