News

DVD kiosk companies announce first-quarter profits

April 27, 2011

Coinstar and NCR both announced today that they have surpassed Wall Street's profit expectations with their first-quarter reports.

According to thestreet.com, Coinstar, the company that operates redbox DVD kiosks, reported earnings from continuing operations of $14.8 million, or 46 cents a share, for the three months ended March 31 on revenue of $424.1 million. The performance was well ahead of the average estimate of analysts polled by Thomson Reuters for a profit of 22 cents a share on revenue of $409.4 million.

Coinstar also provided a bullish outlook for the both the second quarter ending in June and the full year. The company sees earnings from continuing operations of 76 to 86 cents a share for the second quarter and $2.75 to $3.10 a share for the year vs. respective estimates of 68 cents and $2.77 a share.

"Strong growth in our redbox business and consistent performance in the coin business delivered better-than-expected earnings in the first quarter," Coinstar CEO Paul Davis said in a statement. "The quarter was marked by solid execution across our businesses, and the enhancements to operations are showing progress."

NCR, which operates the Blockbuster Express kiosks, also reported financial success for the first part of the year. According to a press release, NCR reported first-quarter income from continuing operations (attributable to NCR) of $10 million, or $0.06 per diluted share, compared to a loss from continuing operations (attributable to NCR) of $19 million, or $0.12 per diluted share, in the first quarter of 2010.

"Our first quarter results reflect good execution by the NCR team and give us incremental confidence to raise guidance for 2011," NCR Chairman and CEO Bill Nuti said in the release "Our core industries generated solid order and revenue growth driven by our global market leadership in the financial services segment, strong demand for our retail self-checkout solutions and growth in services. We secured improved results from our emerging industries segment as well, including new deployments and improving performance in entertainment. As we move through 2011, NCR is focused on continued order momentum, driving adoption of innovative new solutions across customer verticals and furthering productivity and efficiency gains to expand margins and increase cash flow."

Video games coming to redbox
Coinstar also announced that it will offer video game rentals at more than 21,000 redbox locations nationwide beginning June 17. According to a press release, top video games will join new release movies for $2 a day, complementing $1 DVD and $1.50 Blu-ray daily rental prices. The announcement follows a test of video game rentals in select U.S. markets that began in August 2009.

"Redbox will increase consumers' access to video game rentals by leveraging our incredible technology and business model to keep rental prices low for consumers," redbox President Mitch Lowe said in a press release.

The company has tested video game rentals alongside movies at 5,000 redbox locations.

"Redbox has rented more than one million video games in less than two years at these locations, underscoring the popularity of video game play in America," Lowe said.

Upon launch, redbox will feature games across the three major console platforms: PLAYSTATION 3, Nintendo Wii and Xbox 360. Video game titles will range from top releases to popular family and kids' titles.