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Coinstar Q3 Revenue Jumps 42%

Coinstar announced its third quarter numbers today, and the report from the Redbox parent was very positive. Overall revenue was up 42% over the same quarter in 2009, and the company turned a profit of $19.5 million. Revenue in the company’s Redbox division was up more than 54%.

Coinstar CFO J. Scott Di Valerio credited his company’s continued success to the following:

“Focus on our consumers, our partners and growing profitably continued to drive strong growth at the top and bottom line . . . Our solid financial and operating performance enables us to invest for the future and focus on returns for our shareholders. Looking to 2011, we are excited about the opportunities ahead across our businesses.”

One thing missing from Coinstar’s report today was any announcement of a streaming partner, which many industry insiders had been expecting. Coinstar CEO Paul Davis coyly offered the following:

“We are at the table in negotiations, discussing the possibility with a number of partners . . . We’re far better off by partnering [for digital distribution], and we can leverage a partner’s technology. We feel that’s the most prudent path. I’ll tell you there’s a lot of interest out there.”

Will Redbox’s Q3 numbers silence naysayers hoping that Hollywood’s 28-day delays would hurt it more than they have? Or do the company’s relatively slim margins still bear watching? When do you think Redbox will finally announce its streaming partner, and who might that be?

(via Home Media Magazine)

35 Responses to “Coinstar Q3 Revenue Jumps 42%”

  1. Visitor [Join Now]
    Firstlawofnature [visitor]

    The naysayer will not be silenced….that one you can bank on. Potential partners: amazon, wal-mart, direct tv, google.

    Management predicted up to $200 million in cash generated after all expenses and capital expenditures for next year. Thats up from $100 million this year.

    Coinstar is profitable. Redbox clearly has sustainable pricing. Is anyone foolish enough to claim redbox isn’t profitable at this point?

  2. Visitor [Join Now]
    Tee [visitor]

    Flon, coinstar is profitable. That said don’t gloat to much, net income was down 50% and the forecast for next year (made by them) is optimistic. They placed an assload of new kiosks out there, they better be generating more revenue. Did you happen to read far enough into it to know why the income was down so far?

  3. Visitor [Join Now]
    UBM [visitor]

    I wonder if revenue was down partly due to the fact that
    as MCDonalds has been remodeling many of their stores,
    they are finally putting the nail in their severing ties with RedBox?

    They sold their minority interest in Redbox in mar of 2009, and slowly have
    been phasing the kiosks out as they remodel the stores. Perhaps
    this revenue loss was in some ways part of that.

  4. Visitor [Join Now]
    firstlawofnature [visitor]

    No gloating here. Sorry but income was up. Something like 85% higher year over year. There were one-time gains from last year related to the sale of a division I believe. When you exclude those from the prior year the income was up huge.

    Revenue grew dramatically year over year. Not sure why you think it’s down or that mcdonalds is somehow removing kiosks. By any measure coinstar/Redbox has a fabulous quarter. They really knocked the cover off the ball.

  5. Visitor [Join Now]
    Tee [visitor]

    Quote:

    NEW YORK (TheStreet) — Coinstar(CSTR_) stock is surging, as the operator of Redbox DVD kiosks reports earnings that easily top expectations.

    While net income dropped more than 50%, adjusted earnings of 66 cents a share were significantly better than forecasts of 50 cents.

    Revenue surged 42% to $380.2 million from $267.7 million the year prior, driven by growth in its DVD business, which climbed 54.2%. Coin revenue increased at a much smaller 7.3%

    Looking ahead, Coinstar forecasts fourth-quarter earnings in the range of 79 cents to 85 cents a share, on revenue of $415 million to $440 million. Analysts are calling for a profit of 76 cents a share on revenue of $422.9 million.

    The rest of the article – http://www.thestreet.com/_yahoo/story/10905005/1/coinstar-keeps-up-with-netflix.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

  6. Visitor [Join Now]
    Marshall [visitor]

    I to thought McDonalds was removing the kiosks. In my area few of them ever had then, now none do. Wal-Marts have the most but there are a few in grocery stores.

  7. Visitor [Join Now]
    John Small [visitor]

    Pretty dismal numbers considering their #2 competitor shut down completely and their #1 competitor declared bankruptcy.

    • Visitor [Join Now]
      Firstlawofnature [visitor]

      You are a joke. If it was midnight and raining do you think you could fool anyone that it was nothing but blue skys?

      The quarter was a homerun and the shares spiked about 25% today. Do you really believe the whole world is wrong and you are right that things were dismal? If you lead the competition I have all the confidence in the world that redbox is well positioned. Dellusional/unrealistic/buried head competition is always a good thing.

      • Visitor [Join Now]
        John Small [visitor]

        They’ve spiked before and then gone right back down. Look at the YOY for the kiosks. 17% averaged out. That is not a good number.

        Seriously, this quarter was about as good a market as Redbox could ever hope to see and that was all they manager to come up with.

        They need a strong digital partner soon or the implosion will begin.

      • Visitor [Join Now]
        Firstlawofnature [visitor]

        You are delusional. Redbox is generating lots of cash and pricing is very sustainable.

        This was the 1st full quarter of 28 day delay releases so that creates pressure on the top line vs the prior year. A 17% comp is great alone. When you consider the 28 day delay vs the prior year the number is truly outstanding.

        As you know the margins are better with 28 day delay product and you can see the difference sequentially.

        When stores liquidate DVDs on the cheap it hurts in the short term. It’s subsequent quarters where you begin to see the benefit of fewer competitors.

        I’ve never seen anyone so obstinate as you. Redbox continues to prosper yet you claim they will be out of business straight away. Tilting at windmills.

        • Visitor [Join Now]
          John Small [visitor]

          They need to raise their prices sooner rather than later. Their continued refusal to do so is affecting their bottom line. Profit on a per kiosk basis finally has seen an increase after multiple quarter declines. Even so, it remains at a level which is too close to zero for them to operate and expand properly. If Redbox wants to be left behind then sure, continue doing things the same old way. Otherwise, change is a necessity. Take off those rose-coloreed glasses and you’ll see the sharks are circling.

        • Visitor [Join Now]
          Firstlawofnature [visitor]

          Lol. Their refusal to raise prices is clearly affecting your bottom line.

          I see you ignored my point about comparing this year’s revenue with last year’s as it pertains to 28 delay product.

          • Visitor [Join Now]
            John Small [visitor]

            I did not ignore as much as I filed it away in the great log book of things that FLON does not prpoerly understand.

          • Visitor [Join Now]
            firstlawofnature [visitor]

            You are an expert in not using facts or numbers to support your points.

            While you have predicted bankruptcy the coinstar for some time the share price has more than doubled. You sir have been proven wrong.

          • Visitor [Join Now]
            John Small [visitor]

            Those that fail to learn from the past are doomed to repeat it.

            Back to school with you FLON.

  8. Visitor [Join Now]
    Jimbo [visitor]

    Of course Redbox will raise prices. They are offering blu-ray and games now. I have no problem paying 25 to 50 cents more. I am sure mos people wil not have a problem of a small price increase. Netflix will also be raising their prices. It is called inflation. The fact that both companies have held off price increases is amazing. Let’s face it we don’t care about profit margins. You two can argue all you want. All we care about is a good product at a reasonable price. Don’t try to put any words in my post. We will pay for reasonable priced rentals. Inflation is a fact of life.

    • Visitor [Join Now]
      John Small [visitor]

      Exactly.

    • Visitor [Join Now]
      firstlawofnature [visitor]

      Redbox may raise prices but there is a distinction between being forced to and choosing to do so. Redbox has the luxury of not having to raise prices and gaining share at the expense of less efficient operators. Consumers have enjoyed this windfall and likely will for some time to come.

      There are things that redbox can do to combat inflation if they need to without an across the board price increase. Redbox management is smart. They know part of the reason why consumers love redbox so much is the $1 pricing. They are unlikely to mess with that for some time.

      • Visitor [Join Now]
        John Small [visitor]

        FLON said, “Redbox management is smart. They know part of the reason why consumers love redbox so much is the $1 pricing. They are unlikely to mess with that for some time.”

        Then Coinstar is doomed. The continued slow down in physical media will hit them hardest. Why a “smart” management team would want to piss off major studios and turn $2.00 into $1.00 is a question they will have to answer when the shareholders try to string them up.

      • Visitor [Join Now]
        firstlawofnature [visitor]

        So you are saying all physical rentailers, stores and kiosks, are doomed by the pending switch to digital media?

        Netflix pissed off the studios. It’s a rite of passage for aspiring video distributors.

        Shareholders have pushed the shares up over 100% this year. Da ya really think they are pissed at management? The shareholders recognize that $1 a night pricing as allowed them to dramatically grow market share.

        • Visitor [Join Now]
          John Small [visitor]

          No. What I’m saying is that Redbox is relying on low margin rentals to grow market share and that when slippage continues those low margin rentals will doom them.

          BBI used Rev Sharing years ago to secure market share. Worked out great for them. I’m sure their shareholders think it is all fine now too.

        • Visitor [Join Now]
          firstlawofnature [visitor]

          It’s funny. Most all the the people that are skeptical of coinstar in the investment community are focused on demise of the DVD and the rapid rise of digital VOD. Their working assumption is that stores and kiosks are DOA over the next few years. In your warped/wishful thinking future the stores still prosper but redbox fails. Sounds comical actually as there is about a zero percent chance of things going down that way.

          Redbox is the low cost distributor. Consumers love the price and service. It’s all working out very well. Both low cost providers, netflix and redbox share prices are both up over 100% this year. Only the competition isn’t happy with the kiosk trend.

          • Visitor [Join Now]
            John Small [visitor]

            Oh I don’t think stores will prosper. However I suspect they will outlast Redbox since they will get a premium price per rental (compared to Redbox).

          • Visitor [Join Now]
            firstlawofnature [visitor]

            Low cost distributor outlasts high cost distributor. Doubt it.

          • Visitor [Join Now]
            John Small [visitor]

            Cost is not the major factor. This has been explained to you before.

          • Visitor [Join Now]
            firstlawofnature [visitor]

            You don’t explain things chicken little, you preach. What’s worse is that your bread is buttered elsewhere so in your mind redbox is always failing. You’ll never find their performance satisfactory.

          • Visitor [Join Now]
            Jake [visitor]

            However I suspect they will outlast Redbox since they will get a premium price per rental (compared to Redbox).

            Yep, the premium price has been working out great for BlockBuster, hasn’t it. And that’s with the studios bending over backwards to give them advantages.

  9. Visitor [Join Now]
    pootroot [visitor]

    John Small made my day again. I was a little blue and then he made me laugh as usual. thank you Johnnie boy.