Reuters

(Reuters)

Netflix 1Q Profit Rises, But Outlook Disappoints

By Features FOXBusiness

Netflix, Inc. (NFLX) topped Wall Street's views in the first quarter, weighing in with earnings and revenue that easily topped expectations, but the company forecast tepid second-quarter earnings, sending shares lower.

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The DVD-by-mail and video-streaming company forecast second-quarter earnings in the range of 93 cents to $1.15 a share on revenue between $778 million to $798 million. The earnings-per-share view was below the Street’s forecast for $1.19, while the revenue forecast was better than analyst expectations for $763 million, in the fiscal second quarter. The company also forecast domestic subscribers to grow to a range of 24 million to 24.8 million.

Profit rose 88% to $60.2 million or $1.11 a share, compared with year-ago net income of $32 million or 59 cents a share.

Revenue surged to $719 million, compared with year-ago sales of $493.66 million.The results easily topped expectations, as analysts polled by Thomson Reuters had predicted earnings of $1.08 a share on revenue of $703.6 million.

The company added 3.3 million domestic subscribers in the first quarter, which compares to the addition of 1.7 million subscribers in the year-ago quarter. The number of global subscribers also grew to 23.6 million in the first quarter.

In a press release, the company made plain its plan to shift away from its DVD rental business, as streaming becomes more popular. 

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“We believe that DVD will be a fading differentiator given the explosive growth of streaming, and that in order to prosper in streaming we must concentrate on having the best possible streaming service.”

Shares of Netflix fell a fraction of 1% in Monday’s session, finishing the day at $251.67. The stock was down $11.41, or 4.53%, in after-hours trading following the release of results.

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