UPDATE 1-Outerwall profit halves as fewer DVD releases hit rental business
(Compares with estimates; updates shares)
July 31 (Reuters) - Outerwall Inc's quarterly profit fell by more than half as fewer movie DVD releases led to lower revenue for its Redbox video rental kiosk business.
The company's shares fell 9 percent to $50 in extended trading after it also forecast current-quarter revenue well below analysts' average expectation.
Outerwall, whose main rival is Netflix Inc, forecast core diluted earnings from continuing operations of between 99 cents and $1.29 per share on revenue of between $535 million-$565 million for the third quarter.
Analysts were expecting a profit of $1.90 per share on revenue of $612.0 million, according to Thomson Reuters I/B/E/S.
Outerwall revenue forecast came in below estimates even as the company was expected to benefit from the release of a number of blockbuster movies on DVDs in the second half of the year.
Several blockbuster movies of 2014 such as "Captain America: The Winter Soldier," "Godzilla" and "The Amazing Spider-Man 2" are slated to release in DVD formats starting mid-August.
The company's net income fell to $21.8 million, or $1.08 per share, in the second quarter ended June 30 from $46.9 million, or $1.64 per share, a year earlier.
Revenue fell marginally to $549.2 million from $553.1 million.
Outerwall also cited the scarcity of strong content available for rent in June for the fall in revenue.
"June represented the lowest monthly theatrical box office in Redbox history," Outerwall's Chief Executive Scott Di Valerio said in a statement.
Revenue in the Redbox business fell about 7 percent to $445.5 million. Redbox generated about 169.3 million rentals in the quarter, a decrease of 9.3 percent.
Analysts had expected a profit of $1.36 per share on revenue of $559.3 million, according to Thomson Reuters I/B/E/S.
The company's shares closed at $55.02 on the Nasdaq on Thursday. (Reporting By Lehar Maan in Bangalore; Editing by Rodney Joyce)