Netflix coming on strong reporting doubled 2QTR profits

July 26, 2005

Netflix
continues to gain customers despite a feirce competition from the retail giat
Blockbuster, the mail order movie house has published doubled profits in the
second quarter when compared to last year! The company stated on Monday that it
earned $5.7 million dollars for the threee months ending in June. This time last
year they reported a profit of $2.9 million.

Emboldened by the second-quarter surprise,
Netflix management predicted it will finish this year with a profit of
$2.4 million to $11.9 million, a reversal from just three months ago when
the company warned it might lose as much as $15 million with Blockbuster
hot on its trail.

But Netflix didn't have to spend as much
as executives anticipated to fend off Blockbuster in the second quarter,
leaving the company in a much stronger position than almost everyone
expected.

The performance underscored the continuing
popularity of Netflix, which allows subscribers to keep up to three DVDs
at a time for a $17.99 monthly fee. The concept, which depends on a
combination of the Internet and mail delivery, has helped revolutionize
the nation's entertainment habits. Some industry analysts have even linked
Netflix's growth with declining attendance at movie
theaters.

Netflix ended June with 3.2 million
subscribers, a 53 percent increase from a year ago. Blockbuster's online
rental service is believed to have between 750,000 and 1 million
subscribers

Amazing! Our appetitie for movies is phenomenal and it
seems to be that the mail order paradigm is rapidly becoming the choice of busy
or cost conscious consumers. Hard to beleive in this day and age of instant
gratification, that we can sit around and wait for the mailman to bring us our
flicks, but it's happening. You can visit BusinessWeek Online if you want to read the entire article. As a
bit of hindsite stock market trivia, you could have bought some shares of
Netflix for $8.91 on March 21st of this year. Not bad, considering they were
trading Monday, just 4 months later, for
$16.40. Sigh.

Source: BusinessWeek Online