July 25, 2013 / 8:54 PM / 4 years ago

UPDATE 2-Redbox owner Outerwall's forecast falls short of expectations

* Sees 3rd-qtr adj EPS of $1.36/share to $1.51/share vs est $1.63/share

* Sees revenue of $604 mln to $630 mln vs est $614.1 mln

* 2nd-qtr earnings $1.99/share vs est $0.99

* Revenue rises 4 pct to $554.2 mln vs est $564.2 mln

* Redbox sales rise 4.5 pct to $478.5 mln

July 25 (Reuters) - Outerwall Inc, operator of Redbox video rental kiosks, forecast weaker-than-expected current-quarter results, sending its shares down 7 percent in trading after the bell.

The company, which offers self-service movie rentals at about 43,700 kiosks in the United States, said it expects adjusted earnings of $1.36 to $1.51 per share in the third quarter on revenue of $604 million to $630 million.

Analysts were looking for earnings of $1.63 per share on revenue of $614.1 million, according to Thomson Reuters I/B/E/S.

Outerwall recorded a 47-cent per share tax benefit in the second quarter due a change in its method of amortizing content costs. It said the benefit would be largely expensed in the second half of the year.

Redbox, a joint venture with Verizon Communications Inc , mainly competes with Netflix Inc.

Outerwall, formerly known as Coinstar, acquired Redbox in 2008. It also operates about 20,300 coin-counting kiosks, where consumers feed loose change into machines that count it and dispense vouchers.

Wal-Mart Stores Inc accounted for about 16 percent of total revenue from continuing operations of $2.20 billion in 2012. Drugstore chain Walgreen Co accounted for about 16 percent and supermarket chain Kroger Co about 11 percent.

Outerbox said on Thursday that net income rose to $46.9 million, or $1.64 per share, in the second quarter from $36.9 million, or $1.11 per share, a year earlier.

Revenue rose 4 percent to $554.2 million. Redbox revenue climbed 4.5 percent to $478.5 million as more people rented out blue ray discs and video games.

Core diluted earnings per share from continuing operations amounted to $1.91 per share. Analysts had expected earnings of 99 cents per share on revenue of $564.2 million, according to Thomson Reuters I/B/E/S.

Outerwall shares closed at $65.30 on the Nasdaq. They have risen about 20 percent in the last three months.

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