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Outerwall rises on greater profit, stock buyback

Outerwall rises aftermarket as 4th-qtr net income grows and company plans $350M stock buyback

Associated Press

NEW YORK (AP) -- Outerwall shares climbed in aftermarket trading Thursday after the company said its net income and revenue climbed in the fourth quarter, and said it will buy back $350 million in company stock.

Outerwall Inc. shares rose $6.39, or 10 percent, to $70.03 in aftermarket trading.

Outerwall runs Redbox DVD rental kiosks, Coinstar coin-counting machines, and ecoATM, which operates electronics recycling kiosks. The company said its net income rose to $23.8 million, or 82 cents per share, from $22.6 million, or 75 cents per share.

Excluding one-time charges and focusing on continuing operations, Outerwall said it earned $1.68 per share, up from $1.01 per share a year ago. Its revenue increased 5 percent, to $593.7 million from $563.1 million.

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FactSet says analysts expected net income of $1.25 per share on $597.1 million in revenue.

Revenue from Redbox rose 2 percent to $496.4 million and Coinstar revenue grew 8 percent to $80.7 million. Outerwall bought ecoATM in July, and its "new ventures" unit reported $16.6 million in revenue, up from $293,000 a year ago.

The Bellevue, Wash., company said it plans to buy back $350 million in stock through a modified Dutch auction tender offer expected to start on Friday. In a Dutch auction, shareholders can decide how many shares they want to sell and at what price, within a specified range. The company then determines the lowest per-share price within the range that lets it buy the amount of shares that it wants.

Outerwall its net income climbed 16 percent in 2013, to $175.6 million, or $6.16 per share. Revenue grew 5 percent to $2.31 billion. The company said it earned $5.92 per share from continuing operations, excluding one-time items.

The company expects to earn $5.16 to $5.75 per share in 2014 on $2.36 billion to $2.5 billion in revenue.

Analysts are forecasting adjusted net income of $5.87 per share and $2.46 billion in revenue on average.

The company also announced a spate of management changes. Outerwall said Mark Horak, an executive at Warner Bros. Home Entertainment, will become president of the Redbox business on March 17. Coinstar President Mike Skinner is leaving the company after nine years and James Gaherity will be promoted to president. Outerwall also named Maria Stipp the president of ecoATM. Stipp was in charge of the company's new ventures and was interim president of ecoATM.

The company said Skinner is leaving Coinstar to pursue another opportunity.

Outerwall stock added 47 cents to $63.64 during the regular trading session before the release of the earnings report.