DOW JONES NEWSWIRES Coinstar Inc. (CSTR) said Monday its fourth-quarter earnings more than doubled as revenue from the company's Redbox business continued to climb. The company also said its Redbox unit will pay up to $100 million to acquire NCR Corp.'s (NCR) DVD business assets, including its DVD kiosks, certain retailer contracts and DVD inventory. The companies will enter into a strategic supplier arrangement under which Coinstar will purchase products and services from NCR. The deal is expected to close in the third quarter. Coinstar, which operates its namesake coin-counting machines in addition to the Redbox DVD kiosks, gave an upbeat revenue projection for the new year and the first quarter. The company predicted 2012 earnings of $3.80 to $4.30 a share on revenue between $2.08 billion and $2.25 billion. Analysts polled by Thomson Reuters project full-year earnings of $3.86 a share and revenue of $2.17 million. Coinstar forecast first-quarter profit of 76 cents to 91 cents a share on revenue of $530 million to $555 million. Analysts predict earnings of 86 cents a share and revenue of $515 million. Earlier Monday, Coinstar said it would partner with telecom company Verizon Communications Inc. (VZ) to launch an online service featuring streaming videos and downloads in the second half of the year, though few details were released. The move would give Coinstar a path to shifting online as consumers increasingly opt to order TV shows and movies over the Internet. Coinstar's Redbox DVD-rental business has quickly expanded over the past few years, though questions have emerged about its long-term growth prospects. The company raised the price of a standard Redbox DVD rental by 20% in November, its first price increase in eight years. Last week, the company also allowed a contract with Warner Bros. to expire after it rejected a longer rental delay window from the studio. However, the company has said it will continue to provide Warner Bros. films through "alternative means," suggesting it will get the videos from third-party suppliers. Coinstar reported a quarterly profit of $31.5 million, or $1 a share, up from $11.7 million, or 35 cents a share, in the same period a year earlier. Revenue jumped 33% to $520.5 million. In October, the company forecast quarterly earnings of 57 cents to 67 cents a share on revenue between $485 million and $510 million. Operating margin narrowed to 10.5% from 11%. Revenue from Redbox, the company's biggest top-line contributor, rose 40% to $445.6 million. Coin-services revenue increased 4.8% to $74.4 million. Shares closed up 1.8% at $50.56 on Monday. Through the close, the stock is up 11% so far this year. -By Nathalie Tadena, Dow Jones Newswires; 212-416-3287; nathalie.tadena@dowjones.com
