Netflix Posts Profit of 21 Cents a Share, Beating Expectations
Online DVD rental company Netflix reported lower quarterly
net profit but still handily beat Wall Street expectations, sending its shares up more than 9% in after-hours trade.
Netflix posted net earnings of $14.9 million or 21 cents a share, compared with $38.2 million or 57 cents a share, in last year's fourth quarter, when it recognized a 45-cent-per-share tax benefit.
Revenue rose 44% to $277.2 million from $193 million in 2005's fourth quarter.
Analysts, on average, had expected net earnings of 15 cents a share and revenue of $277.2 million, according to Thomson Financial.
Netflix said its subscriber base grew 51% year over year to 6.3 million during the quarter. The company had predicted it would reach at least 6.3 million subscribers by the end of 2006.
In the latest period, the company came under an intensified attack from rival Blockbuster . Blockbuster launched a "Total Access" program that lets subscribers rent DVDs online, then return them to stores to get a free additional rental.
To combat this promotion, Netflix stepped up advertising of its $5.99-per-month plan, which lets subscribers keep one movie at home at a time. On Monday, the Los Gatos, Calif., company reduced the cost of that plan to $4.99 a month.
Netflix also recently unveiled a new feature that will allow users to immediately watch movies and television series on their personal computers.
This step may help the company compete against the growing movie download business, which includes players such as Amazon.com and Apple.