It has been a very busy day at Coinstar. The Bellevue maker of coin-counting machines already announced a strategic partnership between its Redbox video rental business and Verizon.
Now, the company has released strong financial results for the fourth quarter along with the purchase of assets from NCR’s entertainment business. The asset purchase includes Blockbuster Express brand DVD rental kiosks, a business that NCR picked up from the original Blockbuster video rental chain.
Shares of the company jumped more than 16 percent in after hours trading. It now has a market value of $1.5 billion.
“Our strong finish in the fourth quarter capped a great year for Coinstar, including revenue over $1.8 billion, diluted EPS of $3.61 per share and free cash flow over $227 million,” said Paul Davis, chief executive officer of Coinstar. “The strength of our core businesses provides a solid foundation that enables us to focus on key growth initiatives in 2012, including our joint venture with Verizon that was announced earlier today.”
Revenue for the fourth quarter increased 33 percent to $520.5 million, with Redbox revenue growing 39.5 percent to $445.6 million. New kiosk installations and consumer acceptance of price increase from $1 to $1.20 for Redbox rentals fueled the growth. The traditional coin-counting business grew by 4.8 percent.
J. Scott Di Valerio, Coinstar’s chief financial officer, told the Associated Press that the company picked up Netflix customers during the quarter. Netflix lost 2.8 million DVD customers during the past quarter.
The purchase of the NCR assets includes “DVD kiosks, certain retailer contracts, and DVD inventory from NCR’s entertainment line of business,” the company said.
Redbox has more than 29,000 kiosks nationwide.