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Mon, Feb. 8, 9:01 AM
Mon, Feb. 8, 8:02 AM| Mon, Feb. 8, 8:02 AM | 1 Comment
Fri, Feb. 5, 11:59 AM
- Outerwall (NASDAQ:OUTR) is down 15.5% as analysts react to an earnings report where the company noted Redbox rentals crashing 24%, which paced an overall revenue drop of nearly 12%.
- Roth Capital has gone to Sell on the company, while Piper Jaffray downgraded to Neutral from its previous Overweight rating. Piper's cut its price target to $32, from a previous $57; shares are trading today at $27.64.
- “Redbox faces secular headwinds, and while we do not expect a 'fall off a cliff' scenario, we believe the trend is accelerating and will continue to drive Y/Y revenue and EPS decline,” says Piper's Michael Olson. “Given lack of visibility on the Redbox content slate and pace of secular decline, the company is no longer providing revenue guidance.”
- EPS guidance provided was well below consensus, but Olson notes there could be upside in share buybacks that aren't accounted for. The company expects to return 75-100% of free cash flow to shareholders this year.
- Wedbush and JPMorgan Chase both slashed price targets today; Wedbush dropped its target to $40, from $59, while JPMorgan cut its target to $29, from $48.
- Previously: Outerwall call: Price hikes still on table; Olympics presses guidance (Feb. 04 2016)
- Previously: Outerwall sinks 14% after Q4 revenues slide (Feb. 04 2016)
Fri, Feb. 5, 9:17 AM
Thu, Feb. 4, 11:57 PM
- Stock in kiosk firm Outerwall (OUTR -2.8%) crumpled after hours, slipping 16.6% to quote at $27.25, lower than the stock has been in six years.
- On the company's earnings call, CEO Erik Prusch said the company was facing challenges in a secular decline in physical video vs. on-demand, but said there was a side to Redbox that shouldn't be overlooked: new release value.
- "In fact, the vast majority of our customers use Redbox as a complement to, not instead of digital alternatives," Prusch said. He added that physical discs still play a big part in studios' window strategy to maximize revenue.
- Asked whether they should take a more proactive approach to price increases, with VOD hitting $6-plus and Redbox still at $1.50, Prusch said they'd continue to look at price as a lever. "We've got tests going on. We know what results we're going to achieve in a nationwide rollout well in advance of actually doing the rollout. But it is one of the levers. ... We see the increase that we did at the end of 2014 having been accretive overall to revenue. So, the offset or the decline in rentals versus the price increase, the price increase more than offset that."
- The firm switched last year to annual guidance only and for 2016 declined to forecast revenue. It did say -- based on its estimates for release schedule for Q1 and rest of the year, which features a video release-damping Olympics -- it expected core EBITDA of $340M-$380M (short of a consensus for $414.5M), core diluted EPS of $5.00-$6.30 (vs. expected $6.83) and free cash flow of $140M-$190M vs. an expected $212.5M.
- The stock's fall has been precipitous this winter, with shares losing 44.8% of value just over the past two months.
- Previously: Outerwall sinks 14% after Q4 revenues slide (Feb. 04 2016)
Thu, Feb. 4, 5:39 PM
Thu, Feb. 4, 5:00 PM
- Outerwall (NASDAQ:OUTR), down 2.8% during trading hours, has tumbled another 14.4% in postmarket trading after revenues slipped nearly 12% mainly due to a drop in its Redbox entertainment rental business.
- Revenue of $527.2M beat an expected $513.2M, while income from continuing operations of $17.1M came to $1/share, down from $2.68/share in the prior year -- affected not only from the revenue drop but one-time restructuring costs on Q4.
- Revenue by segment: Redbox, $407M (down 17.1%); Coinstar, $83.3M (up 1.7%); ecoATM, $36.8M (up 48.9%).
- In Redbox results, movie rentals fell 24.3% Y/Y amid an "accelerated secular decline in the physical market" along with fewer titles and the loss of some price-sensitive customers with a price increase. The company also pulled some underperforming kiosks, affecting overall volume. Net revenue per rental rose to $2.98 from $2.73.
- Conference call to come at 5:30 p.m. ET.
- Press release
Thu, Feb. 4, 4:14 PM
Dec. 8, 2015, 1:39 PM
- Outerwall (NASDAQ:OUTR) is off 24.4% today after cutting guidance following yesterday's close on disappointing results from its Redbox disc-rental division.
- That division also lost its chief, Mark Horak, but analysts think the move is an overreaction. Wedbush and Piper Jaffray reiterated Outperform ratings (though with new lower price targets), and B. Riley has actually upgraded to Buy.
- Riley's Eric Wold doesn't think the guidance shows any accelerating decline at Redbox, and says his firm already modeled a "healthy" decline in rentals for Q4. "We have been on the sidelines waiting for an entry point and/or stabilization in the business following last year's price hike and believe this post-close decline provides that entry point with our reduced 2016/2017 estimates now driving a FCF yield north of 30%." He has a price target of $58, implying 32% upside from today's newly lower price of $43.92.
- Wedbush lowered its target to $59 and thinks the company was the subject of a planning mistake for Q4: "The cost savings from the keen inventory management clearly outweighed the drop in rental activity from the price increases. However, management increased kiosk inventory in Q4 in order to improve customer engagement, hoping to drive higher volumes by improving quantity and quality. The company misjudged demand, and triggered negative leverage."
- Meanwhile, Piper Jaffray lowered its target to $57.
- Previously: Outerwall cuts guidance on Redbox results; unit chief leaving (Dec. 07 2015)
Dec. 8, 2015, 12:44 PM
Dec. 8, 2015, 9:15 AM
Dec. 7, 2015, 5:40 PM
Dec. 7, 2015, 5:22 PM
- After coming off a halt, Outerwall (NASDAQ:OUTR) has plunged to $44.03 after hours after cutting its full-year guidance and announcing Redbox division chief Mark Horak is leaving.
- Shares are at their lowest levels since Nov. 2012. With Redbox-related fears running high, Outerwall now trades for just 5.6x the midpoint of its revised 2015 core EPS guidance range.
Dec. 7, 2015, 4:33 PM
- Outerwall (OUTR -2%) has cut guidance in a new update based on lower-than-expected revenue from its Redbox unit, and said the leader of that unit is leaving the company.
- Mark Horak is exiting his post, and Outerwall CEO Erik Prusch will be interim president of the unit until a replacement is named.
- For the full year, the company now sees Redbox revenues coming in at $1.75B-$1.765B, down from a previous $1.79B-$1.815B. Consolidate revenue is expected in the range of $2.165B-$2.19B, down from a previous $2.205B-$2.24B (and below consensus of $2.223B).
- The company's lowered expected core EPS from continuing operations of $7.65-$8.15, down from $8.82-$9.52, and free cash flow of $235M-$255M, down from $252M-$282M.
- The company is also discontinuing its SampleIt concept, and taking a noncash charge of about $4.5M in Q4 (about $0.16 impact on core diluted EPS from continuing operations).
- Shares are up 0.2% after hours.
Jul. 31, 2015, 3:58 PM
- Outerwall (NASDAQ:OUTR) has tumbled today, -13.4%, following on yesterday's earnings where revenues fell short of consensus as DVD rentals from its Redbox kiosks fell.
- Rental nights per Redbox disappointed, falling 19% Y/Y. And: "Rental volume is more likely to decelerate than stabilize going forward," Pacific Crest's Andy Hargreaves wrote. "All previous physical (media) formats that we have data on have shown a similar pattern of accelerating declines as they age. We expect DVD to be similar."
- Pricing was up, but rentals per kiosk dropped 8.9%, the fifth straight quarter of declines. Redbox made up 80.5% of the company's revenue.
- Outerwall took an $85.9M charge related to its ecoATM segment, kiosks designed to buy used mobile devices. "EcoATM is a failure," says Wedbush's Michael Pachter. "The impairment charge reflects an honest assessment that the company overpaid for the business, and continuing losses two years after acquisition make us question whether the segment will ever be profitable."
- "Given its unique value proposition, we still expect ecoATM revenue growth and profitability over time as the business scales," said Outerwall interim CEO Nora Denzel.
- The company named Erik Prusch as its new CEO, effective today. Prusch most recently was CEO of Clearwire.
Jul. 30, 2015, 5:40 PM
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