Coinstar Reports Preliminary 2010 Fourth Quarter EPS of $0.65-0.69

Coinstar, Inc. CSTR today announced certain preliminary financial results for the fourth quarter ended December 31, 2010. The company expects revenue for the fourth quarter of 2010 to increase 31% year over year to $391 million, compared with previous fourth quarter 2010 guidance in the range of $415 million to $440 million. The company expected stronger performance from the titles scheduled for release during the 2010 fourth quarter holiday season, particularly from the slate of 28-day delay and higher-priced Blu-ray™ titles, despite a 16% lower box office for scheduled releases compared with those in fourth quarter 2009. In addition, in anticipation of demand for new releases that did not materialize, redbox removed older inventory early, impacting revenue and gross margin. Further, redbox consumers utilized "rent and return anywhere" to a higher level than expected, which caused temporary imbalances in available titles across the kiosk network. As a result, the company expects fourth quarter 2010 GAAP earnings per share (EPS) from continuing operations between $0.65 and $0.69 on a fully diluted basis, compared with guidance in the range of $0.79 to $0.85. GAAP EPS includes a reduction of $0.02 per share due to the expected increase in diluted share count of 1.3 million as a result of convertible debt and option exercise dilution and $0.02 per share due to expected higher share based expense related to the higher share price at the end of the quarter.