Redbox parent Coinstar beat analysts’ estimates with its first-quarter earnings today by announcing a Q1 profit of $6.4 million on revenue of $350.1 million. The company’s profit during the first three months of 2010 tripled that of the same period in 2009.
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One factor that contributed to Coinstar’s bottom line was reduced product costs derived from recent windowing deals with Warner, Fox and Universal. Paul Davis, Coinstar’s CEO, said the following on the subject:
“One of the things that happened with the workaround is we didn’t get the quantities we wanted to stock in our machines . . . We still prefer day and date, and we have studios that believe in that, and see the value in day and date. If a studio is adamant about moving to a window, it’s got to be a win for us, a win for them.”
Other highlights of the earnings call included news that Redbox had added 2,400 kiosks during the quarter, raising its total to 24,800 installed units nationwide. Davis also stated that Redbox plans to offer Blu-ray disc rentals in kiosks across the nation in the “next few months”, though at a higher (but unspecified) price point than its current $1 per night for DVDs.
Do you find yourself renting more, fewer or the same number of movies from Redbox this year compared to last, Insiders? Any guesses on when Redbox will reach 30,000 kiosks?
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What’s next for the kiosk giant?
(via Home Media Magazine)
The windows that just went into effect won’t hit their bottom line until the next 2 quarters. everyone expected this quarter to be decent as the effects havn’t been felt.
Not true at all. The warner 28 delay plus more of the quarter in work around mode plus Wal-Mart limiting in-store purchases to 5 caused many analysts to lower revenue expectations for the quarter. Redbox shocked them by driving far more revenue than expected.
Profit is in line with what was expected.
The tripling of profit is a result of bad numbers last year.
Profit per machine looks like it is falling or is below zero already.
Numbers could have been much worse though.
Now you are being disingenuous. Redbox’s results far far exceeded expectations. That’s why the shares are going to spike today. Statements like that hurt your credibility. I know you are rooting against Redbox (despite what you say) but at least try to remain intellectually honest here.
blah blah blah you drone on and on
That works out to $266 a machine…not a whole lot of room to weather a downturn in rentals.
I hope their decrease in costs with their deals with the studios offsets the decrease in rentals as they implement the 28 day window on New Releases.
It will be interesting to see quarterly results in the future now that are operating under their new conditions.
their stock went uo 20% in after hr trading. I think that is too much
I usually avoid these conversations like the plague but here goes, a 2% margin and the stock goes up 20%, what a joke. The new studio deals are barely 30 day’s old they have nothing to do with 1st qu profits. Oh and the stock should skyrocket when the very thing Redbox is any good for is being stripped away. They won’t get most of the good movies for the first 28 days, all of you that think that doesn’t matter have little to no clue how this business works. By the time they get them 80% of their customer base will have already seen them, and at that point i don’t care if you give em away for $ .50 they have already been seen. This kind of speculative stupidity is why our economy is on such thin ice. All you financial wizards buy as much of there stock as they will sell you, you’ll be rich!!!!
finally someone with some commonsense! and michael lantz for you i would love to someday meet you at an industry event sadly that will never happen because you are not in this industry. you are a computer webmaster that’s it that’s all. you spew opnions like you are an industry insider but you are not you own a web server and poat other peoples articles on your website. that and sugarcoat all things redbox. you actually have no more insight into this industry then anyone else who rents at redbox.
I think running a website in the industry for 5 years qualifies me as having some knowledge above that of the common Redbox renter. But, I welcome all opinions and ideas, no matter if you are in the “industry” or not.
The reality is, my opinions and insights can be quite valuable because I am NOT entrenched in the industry nor do I have a monetary interest in the outcome.
I am not biased one way or the other, and that is what scares those like you most, isn’t it?
Sure, I like Redbox. I wouldn’t have started this site if I didn’t. But, if they succeed or fail, my life will not be changed in any meaningful way.
(BTW, I find it funny you would address me here when I have not made any comment on this article at all. Bring on the FUD!)
once again you bold face lie about how you have no monetary interest in the outcome yet you profit off this site and your apps. your lie tell it anyway you want to. right right as far as your having insight i literally laugh in your face. the answer to your statement that you have run this site for five years so you are more qulified then the average renter is no. you have no more crediability then mr. eric wold. people do not come to your site for your great insight they come for your free codes. you have like five guys john small,flon,redbox,etc…(at least one of these guys actually knows what he’s talking about ) that carry on all the conversation. other then that you are extremely unqualified. that’s like me saying i copy other investors articles and post them so now i’m a stock market guru.
We already had this discussion and I addressed all of your “concerns”, and I am not going to waste my time replying to more of your lame comments. Your opinions of me and this site do not matter to me at all.
If you want to contribute to this site in any meaningful way, feel free to do so. If not, I suggest finding something else to do with your time.
(And, since you are so set on sharing your thoughts on MY “monetary interest” in Redbox, why not go ahead and tell everyone yours?)
Their revenue was supposed to take a hit this quarter and it didn’t. Good luck on the next quarter. They generated more in cash this quarter than many analysts thought they would for the full year. Redbox is here to stay.
Here’s another one of those guys who flood this website!!!!!!!!!!!!!Do you work for redbox or something? are you a kiosk stocker?
Can you take any of the numbers or facts from the earnings release and turn that into a cohesive arguement to support your points?
If you look at the profit and assume none of it came from their other operations then the profit / machine is still falling.
I seriously doubt that the rest of Coinstar’s operations operates at break even.
Which mean the news is even worse.
In fact, it is quite likely that their per machine profit was almost zero for the quarter.
Yes there are other factors to look at but since Coinstar is using their kiosks to drive growth, the fact that they are not profitable or barely profitable should be of concern to their investors.
The house of cards continues to look tippy and it will only get worse as they pile on debt to try and keep the expansion going.
Will the 28 day delay stabilize things for Redbox? Only time will tell.
Small,
You are fabricating things now and I’m embarrassed for you. Redbox’s revenue per kiosk is rising and continues to do so. This is very impressive especially since Redbox is adding new kiosks that drag the average lower since revenue hasn’t ramped up yet. This is a critical measure since every additional rental transaction once the kiosk is contributing positively to corporate overhead is highly profitable.
You seriously doubt any of the other operations are profitable? Coin counting has been profitable for about a decade. There are two small businesses that don’t make much money but I put zero value on them so they are a non-issue.
Disagree all you want but you are either spinning things on purpose or don’t fully understand how to read or interpret financials. Trying to turn the first quarter earnings into a negative story is a waste of time. They had an outstanding quarter.
In all reality, Q1 is not really telling of what is going to happen to Redbox. Q2 results will show what kind of effect that the new 28 day window has on them.
FLON, learn to read.
Revenue does not equal profit.
I said that the rest of their operations are profitable.
Make the connections, take off the blinders, see the truth.
Small,
You are way off. Operating profit (not EBITDA) was up year over year depsite something like $13mm in accelerated depreciation charges that are likely one time in nature. Furthermore segment profit for the other businesses (mostly coin) was down year over year so that means on an operating basis the redbox segment operating profit was up year over year very substantially. You can see this directionaly in redbox’s year over year increase in EBITDA. Since redbox is profitable and revenue per unit is increasing it’s hard to figure how profits per kiosk could be lower. As the units age (year 3 revenue is much higher than year 1 revenue) there is a natural lift to revenue and profit per kiosk.
It seems as if you are taking net income and dividing by units. It is difficult to get an accurate average number of units as we have no idea when in the quarter the installations occured. Likewise you are also hitting them on the one-time charges and higher interest expense. If you really want to get at what redbox is doing you should look at it on a operating basis (before and after depreciation charges). By all measures Q1 was a home run. That’s why when the market got whacked on friday it was way up. We can argue about Q2 and Q3 all you want but trying to spin Q1 into a bad quarter is laughable. It was simply a terrific quarter especially when you take into account the warner deal, the work around, the wal-mart limit of 5 buys and the litigation costs that won’t be there going forward.
You misunderstand the number FLON in your desperate need to see positivity where there is none.
The quarter was not a bad quarter growth wise but there are still plenty of questions whether the machines are actually profitable at all.
The simple numbers do not show the true facts. You need to dig down a little deeper to find the real results.
BB used to claim they were a very profitable company using their EBITDA as well. Did you believe them then? I sure didn’t.
You’re obfuscating the truth. I made my points on operating basis after depreciation expense. Redbox was profitable in Q1 and only a fool would argue otherwise. In addition the company generated significantly more cash after all capital expenditures year over year.
Keep telling everyone the quarter wasn’t profitable. It’s entertaining.
Tee,
By your statement you’re assuming that most people will start to patronize BB again, or either participate in piracy or bootlegging. I don’t think that 80% of Redbox’s customers will go out and purchase these movie from retail, when they can just wait 28 days more to rent it at $1. Consumers are interested in collecting drawers full of movies that they’ll probably not watch more than 3 times. Don’t forget that Redbox still gets 60% of their movies day and date, so while the window will effect titles coming from Universal, Fox, and Warner most movies will still be available on release date.
dilly,
BB is pathetic for what they charge I would simply stay home and watch it on PPV, I am referring to the thousands of small video stores that are now renting brand new releases for $2. There are more than most know, and piracy & bootlegging etc. I’ve been in the business for 20 years and still alive & kicking, NR are like crack everyone wants them immediately demand is always outweighing supply. But we do supply most within the 1st month. By the end of that 1st month most of the New Releases go one the sale rack for under $10, the leg’s on movie’s now are only 1 month. I certainly know if it was the other way around and they got them 1st I would close my doors.
i just like to call a spade a spade and a liar a liar. and you are a liar! keep sitting in your basement in Utah with your web server and your computer pedeling your codes. to bad your other wwbsite insideblockbusterexpress didn’t take off for you when you tried that. Michael you are so transparent. your right your wasting your time and mine so come out of your basement theres a whole world outside.
redbox’s stocks were just being squeezed after hours. it’s on it’s way back down today. i listened to the earnings call and suprise suprise the first softball questions came from eric wold. i myself am shocked like that wasn’t set up. they midaswell of had mr lantz here throwing the softball questions.
Yeah I agree Michael is full of shit.
Turn the channel if you don’t like what’s of TV. Redbox just showed the world that it’s for real. It’ll show you two clowns that again next quarter and the quarter after that. Keep bashing if you want, it won’t affect anything.
find a girlfriend or something better to do with your own time. You have a comment and opinion for EVERYTHING!!! Your views have been stated again and again and again.
i know, how dare someone has an opinion in a free society.
actually in after hr trading it went back up another dollar plus.
Here in San Jose, California – heart of Silicon valley, Red box is installed outside every 7 eleven store now ….I saw Redbox’s growing everyday, with blue-ray comming soon, We can’t wait…..
margins must suck when renting for $1 a day! and free giveaways!
i wouldnt buy a stock like that.
buy coke or walmart! much better values!!!
tony
stocks are my business!
That’s the beauty of the model actually. The margins are low and difficult to compete with. Redbox has high variable costs and low fixed costs, the mirror image of blockbuster stores. One can survive on a minimal amount of revenue, the other cannot.
Ya, the trouble with low margins is that it doesn’t take much from taking a small profit per machine and making millions to taking a small loss on a machine and losing millions.
This new 28 day window might make them actually lose a small amount per machine which they can counteract with lower product acquisitions but then you don’t have the movies that the customers are looking for even at the 28 day mark and you start to lose even more money.
I hope their negotiated costs are enough to not cause them this issue.
Good points. It doesn’t take too many transactions to move the needle on the model. Lower costs will allow for some hit to revenues but overall I think the consumer has spoken on Redbox. They love the service. I think for a huge percentage of the population the price and convenience of Redbox will trump the 28 day delay. So I am betting there is minimal transaction loss from the window.
I have some play money in the market, nothing big, but I would not invest in walmart because the stock has stayed relatively the same price in the last 5 years or so….i need a more risky stock.