Coinstar Raises Profit Forecast Betting on Redbox Growth

Shares rise 6 percent after company reports better-than-expected Q1 results

Coinstar raised its full-year adjusted profit forecast, betting on stronger growth of its Redbox video kiosk business, sending its shares up 6 percent after the bell.

Coinstar, which also reported a higher-than-expected adjusted profit, raised its full-year adjusted earnings forecast to $5.05-$5.55 per share from $4.91-$5.51.

Analysts were looking for adjusted earnings of $5.09 per share for the full year, according to analysts surveyed by Thomson Reuters.

Also read: Redbox Launches Event-Ticketing Service

Coinstar acquired Redbox in 2008 for its DVD kiosk business, and it has become its primary source of sales since then. Redbox offers self-service movie rentals at about 43,700 kiosks, where consumers can rent or buy movies and video games.

The Redbox business accounted for about 87 percent of the company's total sales of $2.20 billion in 2012.

Net income fell to $22.6 million, or 78 cents per share, in the first quarter from $53.7 million, or $1.65 per share, a year earlier.

Excluding items, the company earned 93 cents per share. Revenue rose 1 percent to $574.7 million.

Analysts had expected adjusted earnings of 86 cents per share, on revenue of $579.4 million.