Outerwall Inc (OUTR) shares surge after strong Q4 and buyback

Posted Feb 7, 2014

Outerwall Inc (NASDAQ:OUTR) has announced a strong quarter four and named a new president for Redbox: Mark Horak. Horak is moving over from Warner Bros. Home Entertainment on March 17th to run Redbox. Outerwall’s stock price went from above $63 to above $71.

Outerwall Inc (NASDAQ:OUTR) reported a net income of $22.7 million, which was (down 1%) last year on revenues of $593.7 million (up 5.4%). This revenue is slightly below analyst forecasts of $596.1 million. The diluted earnings from continuing operations at $1.55 a share beat predictions of $1.22.

Redbox contributed $496.4 million to revenues (up 1.7%) and operating income of $111.3 million (up 39.2%). This included a $8 million accounting change that is expected to reverse in the first quarter of 2014.

Redbox hit 192 million in rentals for the quarter (up 2.2%) with the revenues per kiosk hitting 2.1%. Blu-ray discs accounted for 14.2% of rentals and 16.3% of revenues. October rentals were a bit weak and December was not a great month either. November was an exceptional month though because of Grown Ups 2 and White House Down. That is surprising because I saw Grown Ups 2 and thought, “what did I just watch?” Video games accounted for 2.7% of rentals.

The board of directors at Outerwall Inc (NASDAQ:OUTR) authorized a stock repurchase of $500 million, which brings the total to $650 million. The directors authorized a $350 million tender offer. Outerwall is expecting shares to sell for a 20% premium over the previous closing price.

[Source: Deadline]