Redbox's parent down 25% on warning

By Aaron Smith, staff writer


NEW YORK (CNNMoney) -- Coinstar Inc.'s stock price fell Friday as the owner of the movie rental service Redbox pays the price for lowering its earnings guidance.

Coinstar (CSTR) plunged 25% after the company lowered guidance for sales and profit late Thursday. The company cut its fourth-quarter sales forecast to $391 million, from its previously announced range of $415 million to $440 million.

The company also lowered guidance on earnings, to a range of 65 cents to 69 cents a share, compared to the previously announced range of 79 cents to 85 cents.

Coinstar provides "coins to cash" self-service kiosks, typically located in grocery stores, charging a fee of 9.8%. The company also provides financial services, like money transfers and prepaid debit cards.

But it's the Redbox unit, which provides DVD rental kiosks and competes with the online renter Netflix (NFLX), that's causing concern.

Redbox offers movies 28 days after their Hollywood release, and that delay, combined with higher prices for Blu-Ray discs, was the source of the lowered forecast, according to Chief Executive Paul Davis.

"This was Redbox's first holiday season with 28-day delayed titles and we underestimated the impact that the delay would have on demand during the fourth quarter," said Davis in a press release. "We also expected much better performance from Blu-ray and had purchased to a higher level of demand."

Davis added, "While consumer visits to the kiosks remained strong, the number of movies per visit, or basket size, was lower than planned."

Coinstar is scheduled to release its fourth-quarter results on Feb. 3. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,817.90 7.84 0.04%
Nasdaq 4,754.89 41.92 0.89%
S&P 500 2,069.41 5.91 0.29%
Treasuries 2.31 -0.00 -0.22%
Data as of 7:37pm ET
Company Price Change % Change
Bank of America Corp... 17.18 0.06 0.35%
Apple Inc 118.62 2.16 1.85%
AT&T Inc 34.70 -0.58 -1.64%
Microsoft Corp 47.59 -0.39 -0.81%
Intel Corp 36.25 0.66 1.85%
Data as of 4:01pm ET

Sections

The Clydesdale horses, with their signature white feathered legs, have been featured in Budweiser ads for decades. More

Russia's finance minister warned Monday that his country is losing up to $140 billion per year because of falling oil prices and sanctions with Western nations. More

Drone regulation is coming to the United States, and the rules might be too severe for everyday businesses. More

Obama doesn't have the authority to create a startup visa, but part of his reform announcement could include a workaround for entrepreneurs: 'parole status.' More

Ever since the Ebola epidemic erupted in her hometown of Foya, Liberia, Deboriah Foko has been working with Doctors Without Borders to inform others about this deadly virus. Here are journal entries from a day in her life. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.