SAN FRANCISCO (AP) - Coinstar’s third-quarter earnings nearly doubled as its Redbox kiosks for renting DVDs attracted movie lovers irked by recent price increases at Netflix’s video subscription service.
But the results released Thursday contained some more unwelcome news for consumers.
Redbox is raising its prices for renting a standard DVD by 20 percent beginning Monday. The new price will be $1.20 per day, instead of the current $1 daily rate.
That’s not as much of a shock as the price increases of as much as 60 percent that Netflix imposed on its subscribers last month. Still, the possibility that Redbox might be driving away some renters seemed to spook investors as Coinstar Inc.’s stock plunged by more than 12 percent despite a quarter that was better than Wall Street anticipated.
Coinstar Inc. earned $37.1 million, or $1.18 per share, in the three months ending in September. That compared with $19.5 million, or 60 cents per share, at the same time last year.
The results for the latest quarter blew by the average estimate of 88 cents per share among analysts surveyed by FactSet.
The company’s revenue rose 22 percent from last year to $466 million, about $3 million above analyst projections.
The ubiquitous Redbox kiosks in thousands of U.S. stores provided the spark.
Redbox revenue climbed 28 percent in the quarter to $390 million.
Although Coinstar CEO Paul Davis said the company couldn’t know for certain, it appeared Netflix’s customers losses are turning into Redbox’s gains.
As an indication that more people may have been renting from Redbox for the first time, Davis told The Associated Press that the number of unique credit cards used at the kiosks during the July-September period increased by 8 percent from the previous quarter. And the number of unique email addresses from Redbox renters climbed 10 percent from the prior quarter.
“We always try to roll out the red carpet for customers who may feel disenfranchised,” Davis said during an interview with the AP.
Coinstar’s shed $6.58 to $46.37 in extended trading after the results were released. The sell-off threatens to wipe out most of the gains that Coinstar’s stock picked up after Netflix’s higher prices kicked in Sept. 1.
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