Netflix Soars on Upside Surprise

Shares of Netflix Inc. soared in extended trading Monday after the internet video rental company said Q3 profit jumped an unexpected 23% on strong subscriber growth. Net earnings were $15.7 million ($0.23/share) on revenue of $294 million, up $12.8 million ($0.18/share) on revenue of $256 million a year ago. Analysts were expecting EPS of $0.15 $286 million in revenue. "In the third quarter, we remained focused on the fundamentals: improving our service quality and value for our subscribers. Our results today exceeded our guidance for all of our key metrics -- subscriber growth, revenue and net income," CEO Reed Hastings told investors in a press release (full earnings call transcript later today). Net customers were up 24% to 7 million. For the full year, Netflix estimated 7.3 million to 7.5 million subscribers, up from a previous forecast of 6.8 million to 7.3 million. Revenue guidance was boosted to $1.2 billion to $1.205 billion, up from $1.17 billion to $1.185 billion. Netflix shares are up 13% to $26.

Sources: Press release, MarketWatch
Commentary: Netflix, Blockbuster To Grab Spoils From Movie Gallery's Demise • Wouldn't Touch Blockbuster With A Ten-Foot Pole • Netflix: Shares May Rally Now, But Brand Value Eroding
Stocks to watch: NFLX
Earnings call transcript: Netflix Q3 2007

Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.

Comments

[YoungMoney:]

writing has flaws. net customers were not up 24%. ending total subs were up 24% yoy. net subs (additions) were down 42% with paying net subs down 50%.

2007 Oct 22 06:53 PM