Coinstar Inc. jumped to its highest in more than a year after the owner of the Redbox movie-rental kiosks said first-quarter sales and profit exceeded its February forecast, driven by higher prices.
The shares soared 7.3 percent to $65.78 at the close in New York, just short of the record closing high of $66.98 on Nov. 24, 2010. The stock has risen 44 percent this year.
Profit from continuing operations was $1.62 to $1.66 a share, the Bellevue, Washington-based company said yesterday in a statement. Sales advanced to $567 million to $569.2 million. Analysts predicted first-quarter profit of 89 cents a share on sales of $538.6 million, the average of estimates compiled by Bloomberg. Final results will be released on April 26.
The increase underscores investor confidence that Coinstar has adapted to new terms with movie studios, including a delayed release schedule imposed by some. Coinstar said it benefited last quarter from lower-than-expected card-processing fees and the popularity of titles including “Moneyball,” “Puss and Boots” and “50/50.”
“We continue to see upside potential from the price increase and lower credit card fees than planned,” Ronald Bookbinder, an analyst at Benchmark who recommends buying the shares, said in a note to investors.
Comcast Corp.’s Universal Pictures and News Corp.’s Fox have negotiated agreements with Coinstar to delay rentals until 28 days after DVDs are first released for sale. The company initially had trouble adjusting to the new schedule. In February 2011, Coinstar lowered its first-quarter forecasts for sales and profit, saying the delays caused executives to misjudge demand.
Coinstar in January rejected a Warner Bros. proposal to double the 28-day waiting period for its films. Since then, Coinstar has purchased Warner films from retailers.
Two months ago, the company had forecast first-quarter sales of $530 million to $555 million, and profit excluding some items of 76 cents to 91 cents a share in its core businesses. The company reported revenue of $424.1 million in the first quarter of 2011.
For the year, profit from continuing operations will be $4.40 to $4.80 a share on revenue of $2.16 billion to $2.28 billion, Coinstar said.
Coinstar in October raised its one-day rental price on most movies to $1.20 from $1 to counter higher debit-card fees that resulted from federal legislation. Prices for Blu-ray disks and video-game rentals didn’t change.