NEW YORK (
Redbox will roll out DVD kiosks in
Redbox kiosks will be in 700 CVS locations by the end of the year, and in thousands of other in 2011.
The companies did not reveal the terms of the agreement.
The news sent shares of Coinstar advancing 2.1% to $48.40 in afternoon trading.
Coinstar has been looking to expand its service to compete even more directly with rival
. Last month the company said it will begin offering Blu-ray DVDs for $1.50 a night in the fall. It has also previously been reported that Coinstar is looking into creating a streaming service.
Still, last week Coinstar reported second-quarter revenue that missed Wall Street's expectations, igniting questions over the growth prospects of the company.
During the quarter, Coinstar earned $13.4 million, or 42 cents a share, compared with $7 million, or 23 cents, in the year-ago period. Analysts were calling for a profit of 33 cents.
Coinstar revenue surged 34% to $342.3 million from $253.8 million; analysts were predicting revenue of $381.5 million. Coinstar DVD revenue surged 43.9% to $271.9 million.
While it would seem the liquidation of Movie Gallery and Blockbuster store closures would boost Coinstar, shoppers instead flocked to its rivals to snatch up heavily discounted DVDs. Long-term, however, Coinstar should benefit.
Looking ahead, the company expects full-year earnings in the range of $1.88 and $2 a share, with revenue between $1.43 billion and $1.51. For the third-quarter Coinstar is looking for a profit of 46 cent to 52 cents a share, on revenue of $370 million to $390 million.
-- Reported by Jeanine Poggi in New York.
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