Tuesday, October 25, 2011

Netflix Beats Q3 Expectations, Outlook Disappoints

Netflix reported strong Q3 earnings, however the Outlook for the company is disappointing. Netflix shares are down 35% today as the company lost more then 800,000 subscribers in Q3. It also expects its DVD business to decline sharply in the 4th Quarter.

As reported by Zack's equity firm "Netflix reported third quarter 2011 diluted earnings of $1.16 per share, surpassing the Zacks Consensus Estimate of 96 cents per share and increasing 65.7% from the prior-year quarter. Earnings surpassed management’s guidance range of 72 cents to $1.07.

Total revenue of $821.8 million not only increased 48.6% from the year-ago quarter, but also beat the Zacks Consensus Estimate of $813.0 million. The total revenue was in the higher end of management’s guidance range of $799.5 million to $828.5 million.

Despite the company beating the estimates on both top-line and bottom-line, shares plummeted 27.8% to $85.75 in after-hours trading as subscriber exodus was more than the company’s projections. Additionally, acknowledgement of a weak upcoming fourth quarter 2011 weighed down the stock."

Source: Zacks Equity Firm


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