Coinstar sells E-Payment unit, revises 2Q outlook

Coinstar said Wednesday it has sold its E-Payment services business for $40 million to InComm, a prepaid payment solutions company.

The transaction closed Tuesday.

Coinstar CEO Paul Davis said he was pleased the business had found a great home, and said Bellevue-based Coinstar, parent company of the Redbox DVD kiosks, would focus on its core strength in the automated retail business.

Brooks Smith, the chief executive of Atlanta-based InComm, said the acquisition will broaden InComm's distribution of gift cards and other items in retail stores.

Coinstar said the sale will result in a one-time benefit of about $5 million to $7 million in the second quarter, while the unit will be listed among its discontinued operations.

Coinstar now expects second-quarter revenue between $363 million and $383 million and adjusted earnings per share of 28 cents to 32 cents.

Both measures are below what analysts surveyed by Thomson Reuters had expected, although they were polled before the sale was announced. Analysts were looking for second-quarter earnings of 35 cents a share on revenue of $386 million.

Coinstar said it expects full-year adjusted earnings of $1.74 to $1.86 a share and revenue between $1.51 billion and $1.60 billion.

That's roughly in line with analysts' expectations of earnings of $1.84 a share on revenue of $1.58 billion.

Coinstar shares fell $2.03, or 3.8 percent, to $50.95 in after-hours trading Wednesday following the announcement, after closing the regular trading session down 5 cents at $52.98.