Netflix (NFLX) Delivers The Goods In Q3

October 23, 2009 10:22 AM EDT

Subscription movie rental pioneer Netflix Inc. (Nasdaq: NFLX) reported strong third quarter results with significant increases in revenue, EPS and subscriptions, starting with an EPS of $0.55, ahead of the consensus estimate of $0.46 and surpassing the year ago quarter of $0.33.

Revenue also outperformed the analyst estimate of $419.85 million, with a $423.1 million third quarter. Revenue for Netflix saw a boost in the third quarter over the year quarter which was at $341 million

"Our business momentum is strong and our third quarter performance keeps us solidly on course for a record 2009," said Reed Hastings, Netflix co-founder and chief executive officer. "Our differentiated service, which combines DVDs delivered quickly by mail and movies streamed instantly over the Internet, is a key element driving our growth."

The ability to receive Netflix videos directly over the internet and on the Microsoft (Nasdaq: MSFT) Xbox has lead to the significant increase in subscriptions. Subscriber additions for the third quarter totaled 2.18 million, showing a 43 percent increase over the 1.52 million additional subscriptions in the year-ago quarter.

Kaufman Bros.'s analyst maintains a Buy rating on the Netflix shares stating that the pending partnership with a major CE company will drive strong sub growth in early 2010. Kaufman has moved its fiscal year 2009 EPS from $1.85 to $1.98 up to $1.89 to $2.02.

Wedbush analysts are maintaining a Neutral rating on Netflix due to the increasing number of kiosk rental services, such as Redbox, as an offset to the closures of rental stores.

Current market movement on Netflix is up 8.74 percent to 53.97. Microsoft is up 7.37 percent to 28.55.

Related Categories

Earnings

Stocks Mentioned

Related Entities

• UBS
• Kaufman Bros.

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