BELLEVUE, WA -- Coinstar Inc.'s fourth-quarter profit fell 27%, hit by higher expenses from new ventures, while revenue growth slowed in its Redbox DVD-rental business.
Coinstar posted profit of $22.9 million, or 75¢ a share, during the quarter ending Dec. 31, down from $31.5 million, or $1 a share, in the comparable year-earlier period. Quarterly revenue grew 8.4% to $564.1 million, driven primarily by Redbox revenue growth of 9.6% to $488.3 million.
This continues the slowing growth trend the company has reported from its Redbox DVD-rental kiosks in recent quarters. Coinstar's third-quarter profit fell 1%, as fewer new DVD releases and competition for viewers from the summer Olympics slowed demand for movie rentals from its Redbox kiosks. | SEE STORY
Revenue from the company's namesake coin-counting machines in the 2012 fourth quarter remained relatively flat in the recent quarter at $74.5 million.
Coinstar recently entered the streaming video business in a bid to compete with online companies like Netflix Inc. and Amazon.com Inc. It has also launched a ticket-selling service through its Redbox machines and has added self-serve specialty coffee to its repertoire with its Rubi vending machine. These new ventures contributed to an 11% increase in expenses during the quarter ended Dec. 31.
The company gave a downbeat first-quarter forecast of 77¢ to 92¢ a share in earnings and revenue of $568 million to $593 million. Redbox predicted 2013 earnings of $4.91 to $5.51 a share on revenue of $2.38 billion to $2.56 billion.
Among the company's newer ventures on its quest to diversify beyond DVD rentals is selling live event tickets to concerts, comedy clubs, nightclubs, motorsport events and cultural events, among other attractions, through its Redbox kiosks. The service, called Redbox Tickets, launched in Philadelphia in October and is now running on vending equipment in the Los Angeles market.
Redbox sells the tickets at or below face value, with a $1 fee per ticket, plus tax. Tickets can be purchased at the same kiosks where consumers rent DVDs and videogames. Customers can also buy tickets online and print them at home or pick them up at the event venue.
The company announced in early February that Redbox Instant -- its movie-streaming service launched with Verizon in December -- will be available on the Xbox 360 home gaming console later this year. The app lets users access Redbox streaming films and also search for films to reserve for pickup at a Redbox kiosk. A beta test is under way at the Redbox website before it launches to the masses, which you can sign up for at the Redbox website.