Coinstar Sinks on Safeway News

The companies decide to end their nine-year relationship.
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Updated from July 9

Coinstar

(CSTR) - Get Report

and grocery chain

Safeway

(SWY)

have decided to end their nine-year relationship, the operator of electronic coin-counting machines said Wednesday.

"Although we are disappointed that mutually acceptable terms could not be reached, our value proposition remains strong," said Coinstar's chief executive, Dave Cole. "Coinstar's financial position will continue to be very favorable as well." Safeway represented about 10% of Coinstar's revenue in fiscal 2002, Coinstar said.

Coinstar shares were down 28% at $13.49 at the open Thursday. Safeway shares closed down 1.2% at $20.24 Wednesday.

Coinstar said it now expects 2003 earnings of 74 cents to 85 cents a share. That's down from a May forecast for earnings of 83 cents to 97 cents a share, according to

Reuters

. The company reiterated its outlook for the second quarter of earnings of 15 cents to 19 cents a share.