Outerwall Inc Earnings: Here’s Why Investors are Ambivalent Now

Outerwall Inc (NASDAQ:OUTR) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company.

Outerwall Inc Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 51.59% to $1.91 in the quarter versus EPS of $1.26 in the year-earlier quarter.

Revenue: Rose 4.13% to $554.2 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: reported adjusted EPS income of $1.91 per share. By that measure, the company beat the mean analyst estimate of $1.63. It missed the average revenue estimate of $614.07 million.

Quoting Management: “We continued to make good progress on our key initiatives that will begin to deliver for us in the second half of 2013 and drive the business over the long term. Our overall performance for the quarter was solid and we are focused on executing in the second half,” said J. Scott Di Valerio, chief executive officer of Outerwall Inc. “We added ecoATM to the Outerwall family with the acquisition of the remaining interest. We are confident that ecoATM’s innovative, environmentally-minded business model will resonate with today’s technology savvy consumers and drive additional profitable growth for our stockholders in the years to come. Redbox eclipsed 50% of the physical rental market for the first time during the second quarter, and we expect rentals and revenue per kiosks to exceed 2012 levels in the second half of the year as stronger content and enhanced marketing efforts drive improved customer frequency and retention.”

Key Stats (on next page)…

Revenue decreased 3.57% from $574.69 million in the previous quarter. EPS increased 0% from $1.91 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $1.57 to a profit $1.59. For the current year, the average estimate is a profit of $5.11, which is the same with that ninety days ago.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)