Outerwall, Inc. (OUTR)

[starbuxsux]

Outerwall Profit Tops Views, Shuts Down Redbox Ops in Canada

Feb 05, 2015 19:15:00 (ET)

By Maria Armental
Outerwall Inc. will pay its first dividend next month and set aside an additional $250 million to buy back stock as part of its pledge to return 75% to $100% of its annual free cash flow to shareholders.

Shareholders will receive 30 cents a share on March 18.

With the increase, Outerwall, which owns the Redbox movie and videogame rental kiosks and was previously known as Coinstar Inc., has $413.7 million available to buy back shares.

The news come as the company reported it was shutting down its Red box operations in Canada.

Revenue in that segment edged down to $494 million, despite a price increase in December that helped offset weaker results from September and October and an overall decline in the rental market.

Rentals declined 10.7 million to about 181.3 million in the fourth quarter, with same-store sales falling 1.3%, compared with a 0.9% improvement a year earlier. The decline, the company said, was somewhat offset by the higher prices and a continued shift to the more expensive Blu-ray rentals.

Overall, Outerwall reported net income of $43.8 million, or $2.35 a share, compared with $22.7 million, or 82 cents, a year earlier. Core profit rose to $2.44 a share from $1.68 a year earlier.

Revenue rose 1.16% to $600.6 million.

Outerwall had projected a profit of $2.40 to $2.52 million on revenue of $598 million to $602 million.

For the year, the company expects core profit from continuing operations of $6.71 to $7.71 a share on revenue of $2.31 billion to $2.46 billion, compared with the consensus of $7.57 a share on $2.4 billion in revenue.

It said it plans to close 1,000 to 1,900 Redbox kiosks in the U.S. and up to 100 Coinstar kiosks and open 600 to 1,200 ecoATM kiosks, which allow consumers to sell and recycle used cellphones, tablets and MP3 players.

In the fourth quarter, Outerwall installed 380 net ecoATM kiosks, bringing its total to 1,890 at the end of the quarter.

Shares fell 0.86% to $61 in recent after-hours trading.

Through Thursday's closing, the company's stock--which set a 52-week-high on Jan. 16 trading at $77.94--was down 2.60% over the past 12 months.

Write to Maria Armental at [e-mail]


Access Investor Kit for Outerwall, Inc.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US6900701078

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

February 05, 2015 19:15 ET (00:15 GMT)


Copyright (c) 2015 Dow Jones & Company, Inc.