(Reuters) - Coinstar Inc (CSTR.O), the operator of Redbox video rental kiosks, announced the unexpected departure of its chief executive Paul Davis, just as the company launched its much-anticipated online streaming service.
Davis, who has been the CEO for more than three years, would retire on March 31 and also vacate his board seat, the company said. Coinstar shares fell 5 percent to $49.60 in after-market trade on Thursday.
Galen Smith, a finance executive from the Redbox subsidiary, will take over as the new CFO.
The shakeup comes at a time when Coinstar is trying to expand into the lucrative, but highly competitive, online video streaming market through a partnership with Verizon Communications (VZ.N).
“While we didn’t expect it, its not a big shift,” analyst Lawrence Berlin of First Analysis Corp said.
Coinstar and Verizon formed a joint venture in February last year to sell video services in a market that is dominated by Netflix Inc (NFLX.O) and has several new entrants such as Amazon.com Inc’s (AMZN.O) Prime, Hulu Plus and HBO Go.
Davis, 55, decided it was the right time to retire from the company after 5 years, a company spokeswoman told Reuters.
Davis was the company’s chief operating officer before taking the helm.
Coinstar also reiterated its fourth-quarter revenue and adjusted EBITDA outlook issued in October, and said lower expenses would help it achieve earnings at or above the high-end of its projected range.
Coinstar had forecast fourth-quarter core diluted earnings of 62 cents per share to 77 cents per share from continuing operations on revenue of $552 million to $602 million.
Reporting by Neha Alawadhi and Himank Sharma in Bangalore; Editing by Sreejiraj Eluvangal