Coinstar Rockets Higher on 42% Revenue Increase (CSTR)

Shares of Coinstar, Inc. CSTR are shooting higher in the after-hours trade after the company reported a 42% year over year increase in revenues along with a 73% increase in earnings (28% when accounting for discontinued operations*). "Coinstar's exceptional third quarter performance demonstrates the strength of our leading Coin and DVD businesses, and our ability to execute, drive operational efficiencies and deliver what our consumers want," said Paul Davis, chief executive officer of Coinstar, Inc. "We are confident in our growth prospects and believe we are in a great position to continue creating value through our automated retail strategy." Much of the growth was (once again) fueled by CSTR's redbox segment, which is not surprising given the $48.1 million in capital expenditures during Q3, the majority of which went to the redbox segment. For the 2010 full year, Coinstar management updated guidance and now expects consolidated revenue between $1.460 billion and $1.485 billion, EBITDA between $291 million and $297 million, GAAP EPS from continuing operations between $2.14 and $2.20 on a fully diluted basis, as well as free cash flow from continuing operations between $100 million and $110 million. During the third quarter, Coinstar repurchased 1.1 million shares of common stock for $49.2 million. The company also retired $75 million of the amount outstanding on its revolving credit facility and terminated the associated interest rate swap. *During the quarter, CSTR sold its Money Transfer business to Sigue Corporation for roughly $41.5 million.