October 28, 2010 / 10:05 PM / 9 years ago

UPDATE 1-Coinstar up on Redbox DVD growth, outlook

* Q3 EPS $0.60 vs Wall St view $0.50

* Sees FY10 EPS between $2.14 and $2.20

* Sees FY10 rev between $1.46 bln and $1.485 bln

* Wall St view FY10 EPS of $1.91 on rev of $1.472 bln

NEW YORK, Oct 28 (Reuters) - Coinstar Inc (CSTR.O), the electronic kiosk company, raised its full-year outlook on Thursday after posting a big jump in sales at its DVD rental unit Redbox, sending its shares up more than 10 percent after the market’s close.

The Bellevue, Washington company, which has courted controversy with Hollywood for Redbox’s $1 a night DVDs, said revenue at the unit rose 54 percent.

Net income was $19.5 million, or 60 cents a share, compared with $41.4 million, or $1.34 a share a year ago. The company said the quarter was impacted by one-time items.

Total revenue rose by 42 percent to $380.2 million.

Analysts had on average forecast profit of 50 cents on revenue of $381.2 million, according to Thomson Reuters I/B/E/S.

In response to the strong quarter, Coinstar raised its full year outlook for net income to between $2.14 and $2.20 a share.

It said full year revenue is now forecast to come in between $1.460 billion and $1.485 billion.

Analysts had on average been expecting full-year profit of $1.91 on revenue of $1.472 billion, according to Thomson Reuters I/B/E/S.

For 2011 Coinstar said it expects full-year per share profit between $3.00 and $3.50 on revenue between $1.80 billion and $1.95 billion.

Redbox’s success comes as Hollywood worries about the future of the once-healthy home video market, which was previously led by DVDs. Last week Netflix Inc (NFLX.O), the biggest DVD rental service in the U.S, said it would it start offering a Web-streaming-only service for its subscribers. Last month, the one-time dominant DVD rental store Blockbuster Inc BLOAQ.PK filed for bankruptcy. (Reporting by Yinka Adegoke; Editing by Phil Berlowitz)

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