UPDATE 1-Redbox operator Outerwall raises buyback after profit beat
* Fourth-quarter adj core EPS from cont ops $1.68 vs est $1.22
* Rev $593.7 mln vs est $596.1 mln
* Hires Warner Bros Home Entertainment executive to run Redbox unit
* Shares up 10 pct after market (Adds details, background, compares with estimates)
By Lehar Maan
Feb 6 (Reuters) - Outerwall Inc raised its share buyback program by $500 million to about $650 million, and named a Warner Bros Home Entertainment executive to run its Redbox video-rental business.
Outerwall shares rose 10 percent in extended trading after the company reported a better-than-expected quarterly profit, helped by cost cuts.
The company also said it planned to launch a modified Dutch auction tender offer for $350 million of its common stock on Feb. 7.
"They are about to shrink their share count by a significant amount," Wedbush Securities analyst Michael Pachter told Reuters.
The buyback is likely to reduce the number of shares by 4.5 million, Pachter said.
The company had 27.6 million shares outstanding as of Dec. 31.
Outerwall, looking to cut costs, said in December that it would reduce its workforce by 8.5 percent and discontinue three new ventures - Rubi coffee kiosks, Crisp Market food kiosks and Star Studio photo booths.
"We do expect to generate $22 million of annualized savings beginning this quarter from the restructuring actions we announced in December," Chief Financial Officer Galen Smith told analysts on a conference call.
The company on Thursday named Mark Horak as president of its Redbox division, replacing replace Anne Saunders. Horak comes from Warner Bros Home Entertainment Inc, an unit of Time Warner Inc.
Warner Bros Home Entertainment provides services such as video-on-demand and subscriptions for its videos via cable, satellite, online and mobile channels.
Redbox is a joint venture between Verizon Communications Inc and Outerwall and competes with video-rental giant Netflix Inc.
Outerwall also owns and operates about 20,300 coin-counting kiosks, where consumers feed loose change into the kiosks, which count the change and then dispense vouchers.
The company's net income marginally fell to $22.7 million, or 82 cents per share, in the fourth quarter, from $22.9 million, or 75 cents per share, a year earlier.
Adjusted core diluted earnings per share from continuing operations were $1.68 per share.
Analysts had expected adjusted earnings of $1.22 per share on revenue of $596.1 million, according to Thomson Reuters I/B/E/S.
Revenue rose 5.4 percent to $593.7 million but missed the average analyst estimate of $596.1 million.
Redbox revenue rose marginally to $496.4 million, and Coinstar unit revenue rose 8.4 percent to $80.7 million.
Outerwall forecast first-quarter core diluted share from continuing operations of 77 cents to 97 cents per share on consolidated revenue of $570 million to $600 million.
Analysts on average were expecting adjusted earnings of $1.29 per share on revenue of $607.1 million, according to Thomson Reuters I/B/E/S.
Shares of the company closed at $63.64 on the Nasdaq on Thursday. (Editing by Sriraj Kalluvila and Supantha Mukherjee in Bangalore)