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Netflix turns to profit in 1st qtr, ups forecast By Gina Keating
Mon Apr 24, 5:02 PM ET



LOS ANGELES (Reuters) - Online DVD rental company Netflix Inc. (Nasdaq:NFLX - news) turned in a larger-than-expected quarterly profit and raised its revenue and subscriber forecasts, sending its shares to a new 52-week high in after-hours trade on Monday.

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The company reached 4.87 million subscribers during the quarter from 4.2 million in the fourth quarter. The company raised its 2006 subscriber target to 6.3 million from 5.9 million.

The strong earnings report and bright forecast boosted the company's share price 3.4 percent above its previous 52-week high.

Net income was $4.4 million, or 7 cents per share, compared with a loss of $8.8 million, or 17 cents per share, a year ago.

Revenue rose 47 percent to $224.1 million from $152.4 million in the year-ago first quarter.

Analysts, on average, were expecting net earnings of 1 cent per share and revenue of $221.2 million for the first quarter, according to Reuters Estimates.

The company also saw churn, or subscriber cancellations, drop to 4.1 percent from 5 percent in the year-earlier quarter.

Subscriber acquisition costs fell during the quarter to $38.47 from $38.68 a year ago.

Netflix forecast second-quarter net income of between $9.5 million to $13.5 million, revenue of $238 million to $242 million and ending subscribers of 5.1 million to 5.3 million.

For the fiscal year, Netflix expects net income of $29.5 million to $35.4 million, pretax income of $50 million to $60 million, revenue of at least $990 million and ending subscribers of at least 6.3 million.

The company's earlier forecast had been for fiscal year revenue of at least $960 million.

Wall Street expects net profit of $11.2 million and revenue of $237.3 million in the second quarter, and fiscal year net profit of $33.9 million and revenue of $977.97 million.

Netflix shares rose 11 percent during the first quarter, which ended March 31.

During the same period, shares of rival Blockbuster Inc. (NYSE:BBI - news) rose 6.4 percent to $3.97, while Movie Gallery Inc. (Nasdaq:MOVI - news) dropped 47 percent to $3.02 on declining same-store rentals and now-resolved problems with its debt covenants.

Netflix shares rose to $32.82 in after-hours trade on Monday on INET -- surpassing the previous 52-week high of $31.75 on April 19 -- after closing at $31.24 on Nasdaq.

http://news.yahoo.com/s/nm/20060424/...tflix_earns_dc

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