Shares of Redbox parent Outerwall fall as CEO resigns, company narrows 4Q revenue guidance

Markets Associated Press

Outerwall Inc., which owns the Redbox DVD rental service and Coinstar coin-counting machines, said Tuesday that its CEO has resigned and a board member will serve as interim CEO while the company seeks a successor.

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The company also raised its fourth-quarter earnings guidance but narrowed the range of its revenue outlook. The report sent shares down 19 percent in afternoon trading.

The moves were the latest sign that the Bellevue, Washington-based company is facing tough competition as technology has spawned convenient alternatives that give consumers quick and easy access to thousands of movies and TV shows. Those options include Netflix's $9-per-month Internet video service, with 37 million U.S. subscribers, and various video-on-demand packages offered by cable- and satellite-TV providers.

Outerwall said its CEO J. Scott Di Valerio has left the company. The company did not give a reason for his departure other than saying it was the "right time for a leadership change" as It seeks to improve profitability.

Nora Denzel, a board member, will serve as interim CEO while the company seeks a permanent successor.

The company expects quarterly earnings per share of $2.40 to $2.52, compared with prior guidance of $1.85 to $2.15. Analysts expect $2.13 per share, according to FactSet. The company now expects revenue of $598 million to $602 million, versus a prior range of $575 million to $605 million. Analysts expect $598.4 million. Outerwall plans to report fourth-quarter and full-year earnings on Feb. 5.

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Shares fell $14.78, or 19 percent, to $62.97 in late day trading.