Coinstar Inc. (CSTR), owner of the Redbox movie-rental kiosks, declined in extended trading after its full-year profit forecast fell below some analysts’ estimates.
Coinstar dropped as much as 4.9 percent and fell 2.9 percent to $65.52 in trading after the close in New York after the company reiterated a 2012 profit prediction from continuing operations of $4.40 a share to $4.80 a share. Analysts’ estimates averaged $4.77 a share, with three above $4.80 a share, according to data compiled by Bloomberg.
Coinstar expects some costs to increase during the second half of the year as the company expands its kiosk businesses and develops a joint venture to offer video streaming with Verizon Communications Inc., Scott Di Valerio, chief financial officer, said on a conference call. In the first quarter the company benefited from higher prices for Redbox rentals and lower-than- expected debit card processing fees.
First-quarter profit was $53.7 million, or $1.65 cents a share, compared with $14.8 million, or 46 cents a share, a year earlier, Bellevue, Washington-based Coinstar said today in a statement. That compared with the range of $1.62 to $1.66 a share it forecast earlier this month.
Some investors may have been expecting a higher profit range for 2012 after the company posted first-quarter results at the top-end of estimates, Wedbush Securities Inc. analyst Michael Pachter said in a telephone interview.
“The company is being too conservative,” Pachter said. “The street will not tolerate businesses that show sequential decline.”
The annual profit forecast suggests lower quarterly earnings for the rest of the year, Pachter said.
The company forecast second-quarter profit from continuing operations of $1.09 a share to $1.24 a share, more than the $1.05 average of analysts’ estimates.
Coinstar in October raised the price of a nightly rental cost for standard DVDs to $1.20 from $1, saying that the fees were expected to go up because of federal legislation. Prices for Blu-ray disks and video-game rentals didn’t change.
Net income jumped to $53.7 million, or 1.65 a share, from $8.5 million, or 26 cents, a year earlier.
Sales rose to $568.2 million from $424.1 million. In its preliminary report on April 12, the company forecast sales to be $567 million to $569.2 million.
Coinstar rose 3.3 percent to $67.51 at the close in New York and has risen 48 percent this year.
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