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Outerwall Fires CEO, Shares Sink

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Outerwall Inc (NASDAQ: OUTR) shares nose-dived Tuesday after the company abruptly fired its chief executive and narrowed its fourth-quarter earnings outlook.

The provider of Redbox video rental boxes and retail change machines changed hands recently at $69.48, down more than 10 percent.

Outerwall said J. Scott Di Valerio has stepped down as CEO and resigned from its board.

Outerwall named Nora M. Denzel interim CEO and said it will immediately begin a search for a permanent replacement.

"To accelerate the progress we are making, the board believes that now is the right time for a leadership change," Chairman Nelson Chan said in a statement which didn't elaborate on changes.

Di Valerio had been slated as recently as January 12 to offer an outlook to analysts during Outerwall's February 5 fourth-quarter conference call.

The company narrowed its fourth-quarter earnings forecast Tuesday to between $2.40 and $2.52 a share, on revenue of $598 million to $602 million.

Wall Street expects fourth-quarter earnings of $2.06 a share on revenue of $596.3 million.

In October, the company had forecast fourth-quarter earnings of $1.85 to $2.15 a share, on revenue of from $575 million to $605 million.

Outerwall, whose video service competes with the far larger Netflix, Inc. (NASDAQ: NFLX) and Amazon.com, Inc. (NASDAQ: AMZN), has seen short interest in recent months ranging between about 6.7 million and 7 million of its 18.9 million shares outstanding.

Posted-In: J. Scott Di Valerio Nora M. DenzelNews Guidance Management

 

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