* Fourth-quarter adj core EPS from cont ops $1.68 vs est
* Rev $593.7 mln vs est $596.1 mln
* Hires Warner Bros Home Entertainment executive to run
* Shares up 10 pct after market
(Adds details, background, compares with estimates)
By Lehar Maan
Feb 6 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
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
"They are about to shrink their share count by a significant
amount," Wedbush Securities analyst Michael Pachter told
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.
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
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
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
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
(Editing by Sriraj Kalluvila and Supantha Mukherjee in