Netflix profit results last quarter 2004 first quarter 2005

January 26, 2005

GristyMcFisty used our news submit to tell us the latest on the
financial situation for Netflix. We all know that there has been a "Crazie
Eddie" contest going on to see who can get us our mail order DVD movies the
cheapest. Blockbuster holds the belt right now, and they even dropped late fees
in their stores to boot. But, are they making any money? Netflix says they
are... or were.

Online DVD rental company Netflix on Monday posted higher fourth-quarter earnings driven by subscriber growth and historically low subscriber turnover, but said it was headed for net losses in the current quarter and possibly the 2005 fiscal year. The company, which previously had announced plans to run at break-even while it focuses on growth, forecast subscriber growth targets broadly in line with its previous goal of hitting 4 million by year end, and its shares rose 15 percent in after hours trade.

The Los Gatos, Calif.-based movie rental
service reported quarterly earnings of $4.8 million, or 8 cents per share,
compared with $2.3 million, or 4 cents a share, a year
earlier.

Unfortunately, the fourth-quarter net income figure
included a $3 million loss the company took for postponing its plans to expand
into the United Kingdom so that it could focus on U.S. efforts. Not only
that, but the online rental giant took it hard in the pocketbook when they
slashed rental pricing of it's most popular model to $17.99 from $21.99. But,
they had litle choice as Blockbuster, Walmart and even a rumor of Amazon getting
into the business, sent them on a frenzy to collect subscribers.

Netflix is expected to post a first-quarter 2005 net loss of $16 million
to $19 million, and a fiscal year loss of $5 million to $15 million. How they
can turn around on those first quarter losses is a mystery, but they hope
to have a customer base of around 4 million subscribers by years end, maybe that
will help. That's a lot of DVDs going through the mail
system!

Source: C|Net