Coinstar shares soar after 1Q earnings beat Wall Street view

Shares of Bellevue, Wash.-based Coinstar jumped $5.78, or 18 percent, to $37.78 at midday. Previously, shares traded between $24.69 and $34.97 over the past year.

Coinstar's profit grew to $2.7 million, or 10 cents per share, from $2.6 million, or 9 cents per share, a year ago. The latest quarter included amortization and stock-based compensation costs totaling 8 cents per share.

Revenue soared 44 percent to $190.5 million, from $132.3 million a year earlier.

Analysts polled by Thomson Financial expected a profit including items of just 4 cents per share on revenue of $182.7 million.

The company, which also makes skil-crane and kiddie ride entertainment machines, attributed its results to the purchase of electronic money transfer provider GroupEx Financial Corp. in January, as well as its increased stake in DVD kiosk company Redbox Automated Rental LLC.

Coinstar forecast second-quarter earnings of 8 cents to 15 cents per share on revenue of $200 million to $210 million. Analysts expect a profit of 12 cents per share on revenue of $202.2 million.

D.A. Davidson analyst John Craft lifted his rating on the stock to "Buy" from "Neutral," citing the company's improving financial outlook and lower expected risks. He raised his 12-month price target to $38 from $30.

But Banc of America Securities analyst T.C. Robillard said there are too many moving parts at play to get overly excited about the stock at current levels. He is optimistic in CoinStar's outlook for late 2009 and into 2010, but believes results in the meantime may be "lumpy" as the company remains in investment mode for a variety of its businesses for the next several years.

He reiterated a "Neutral" rating on the stock and $32 price target.