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Blockbuster Express Ups Q1 Loss

28 Apr, 2011 By: Erik Gruenwedel

NCR Corp. April 28 reported that its Blockbuster Express kiosk business unit reported a first-quarter (ended March 31) operating loss of $15 million, up 25% from an operating loss of $12 million during the previous period.

Duluth, Ga.-based NCR owns and operates nearly 9,000 Express kiosks under a license agreement with Dallas-based Blockbuster Inc.

The company attributed the increased loss from expenditures tied to the rollout of thousands of kiosks nationwide. Revenue from Express kiosks increased 106% to $37 million compared to revenue of $18 million last year, and up 16% in revenue from the fourth quarter, ended Dec. 31.

John Bruno, EVP, business solutions, said the average Express kiosk is 8 months old, and thus, ongoing emphasis continues to focus on how individual kiosk perform ("per-unit economics") rather than how many units are deployed. NCR redeployed 300 Express kiosks in the quarter, with plans to redeploy 700 units in the second quarter.

Bruno said Express kiosks would also up street date releases of select 20th Century Fox Home Entertainment titles at premium prices in the second quarter following successful tests around the release of Oscar-nominated Black Swan.

"There is great potential from premium content and represents a key competitive advantage for Express kiosks," Bruno said in an analyst call. "The potential for this business remains exciting."

NCR expects a $50 million reduction in capital expenditures on Express kiosks in 2011 compared to 2010. Revenue is projected to range from $175 milion to $200 million, with annual earnings from $10 million to $20 million.

CEO Bill Nuti said Dish Network's acquisition of Blockbuster bode well for Express kiosks.

"Our [options have] improved," Nuti said, without elaborating.

NCR’s overall quarterly earnings were the best in the ATM manufacturer’s history, despite the diluted entertainment results.

About the Author: Erik Gruenwedel

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