The company that owns those DVD-vending machines said sales are terrible, and now the stock is crashing . By Akin Oyedele | Business Insider – Tue, Dec 8
Outerwall is having a tough time getting people to rent DVDs.
Shares of the the supplier of movie and game-rental kiosks plunged nearly 30% in after-hours trading on Monday after it lowered its forecast for full-year revenues.
The company said its fourth-quarter profitability would be dented by its increased spending on marketing and additional content, to persuade customers to return to “normal renting patterns”.
With the abundance and affordability of content-streaming services like Netflix and PlayStation Now, demand for rental services has plummeted.
Outerwall said in a statement, “While Redbox has driven improvements in both unique customers and total rentals during the first two months of the fourth quarter relative to the third quarter, the business has not met the company’s performance expectations and continues to remain challenged by the historically low box office during the third quarter, which was the worst theatrical box office in Redbox kiosks in four years.“
Outerwall said it expects Redbox’s 2015 revenues to come in between $1.750 billion and $1.765 billion, versus the prior range of $1.790 billion to $1.815 billion.
It sees diluted earnings per share from continuing operations at between $7.65 and $8.15, versus $8.82 to $9.52 previously guided.
Outerwall shares are down about 23% year-to-date. Here’s a chart showing the drop in after-hours trading:
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Source: https://sg.finance.yahoo.com/news/company-owns-those-dvd-vending-215822128.html
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