Coinstar Declines After Second-Quarter Revenue Trails Estimates

Coinstar Inc., owner of the Redbox movie-rental kiosks, fell the most in almost two months in Nasdaq trading after delayed access to some new DVD releases caused second-quarter revenue to miss analysts’ estimates.

Sales rose 35 percent to $342.4 million, the Bellevue, Washington-based company said yesterday. That was less than the $381.3 million average of seven analysts’ estimates compiled by Bloomberg.

DVD sales rose less than anticipated because of agreements with three studios that delayed Redbox’s access to some new releases until 28 days after they go on sale in stores. Some investors may be reluctant to accept the company’s new forecast because of the second-quarter miss, said Michael Pachter, an analyst at Wedbush Securities in Los Angeles.

“Blame the stock-price decline on management being less transparent then they needed to be,” said Pachter, who has an “outperform” rating on the shares and doesn’t own any. “It’s a lack of confidence we’re seeing today.”

The studio agreements created a gap of about three weeks in the supply of new releases in Redbox machines, the company said yesterday. Coinstar spokeswoman Marci Maule said the company doesn’t comment on daily share-price fluctuations.

Coinstar tumbled $2.59, or 5.4 percent, to $45.50 at 4 p.m. New York time in Nasdaq Stock Market trading. That was the shares’ biggest daily percentage drop since June 7. They have gained 64 percent this year.

To contact the reporter on this story: Michael White in Los Angeles at mwhite8@bloomberg.net

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