Citing 28-day delayed new release titles and softer than expected Blu-ray performance, Redbox parent Coinstar has lowered its full-year 2010 financial expectations. Coinstar also dropped its expected Q4 2010 earnings per share, which will be announced February 3, from between 79 cents and 85 cents to between 65 cents and 69 cents.
Coinstar CEO Paul Davis offered the following explanation for his company’s bearish outlook on earnings:
“Overall, the performance of the Redbox business during the fourth quarter was not in line with our forecast . . . 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. We also expected much better performance from Blu-ray and had purchased to a higher level of demand.”
Davis did note several bright spots in Redbox’s performance:
“Nevertheless, Redbox revenue grew 38% year over year in the fourth quarter . . . Consumers rented over 144 million movies during the quarter and same-store sales increased 12.5% year over year in the fourth quarter.”
Will the company be able to absorb these setbacks and keep expanding, or should Redbox fans be worried?
(via Home Media Magazine)