Earnings season is in full swing, with huge numbers of companies having already given their latest numbers to investors. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.
Let’s turn to Coinstar, Inc. (NASDAQ:CSTR). The company has gone well beyond its change-counting machines to focus on movie rental kiosks, which have opened the door to a huge potential business. Let’s take an early look at what’s been happening with Coinstar over the past quarter and what we’re likely to see in its quarterly report on Thursday.
Stats on Coinstar
|Analyst EPS Estimate||$0.73|
|Change From Year-Ago EPS||(27%)|
|Revenue Estimate||$580 million|
|Change From Year-Ago Revenue||11.5%|
|Earnings Beats in Past 4 Quarters||4|
Will Coinstar deliver great results?
Analysts have grown somewhat more optimistic over the past three months about Coinstar’s prospects, raising their earnings-per-share estimates by a couple of pennies. The stock has also reflected that enthusiasm, with shares rising about 9% since early November.
The big story with Coinstar has come from its Redbox service, which took on Netflix, Inc. (NASDAQ:NFLX) and its mail-delivery DVD service with 35,000 Redbox kiosks conveniently located in supermarkets and other high-traffic stores. Given Netflix’s decision to de-emphasize the DVD side of its business, Coinstar has been able to capitalize, in part by picking up the Blockbuster Express DVD-machine business of NCR Corporation (NYSE:NCR) last year.
But the future of Coinstar may well depend on its Redbox Instant streaming service. Partnering up with Verizon Communications Inc. (NYSE:VZ) , the service has been plagued by delays and currently offers only a limited menu of titles, but Coinstar is hoping that providing credits for four kiosk rentals will help make its subscription price a better value proposition than Netflix’s streaming-only offering.