Netflix Shares Rise 15% on Revised Q4 Subscriber, Revenue Projections

Authored by Mark Hefflinger on November 18, 2004 - 4:56am.

Los Gatos, Calif. -- Online DVD rental service Netflix on Thursday raised its subscriber and revenue projections for the fourth quarter of 2004, sending shares of the company up nearly 15% in trading on Thursday. Netflix now expects to end the quarter with between 2.45 million and 2.65 million subscribers, up from earlier projections of 2.3-2.5 million. It also now expects revenue of $139 million to $143 million, as compared with an earlier forecast of $138-$142 million. However, the company did lower its income guidance slightly, citing increased costs of acquiring the new subscribers. Last month, Netflix slashed the price of its DVD rental service from $21.99 to $17.99, in the face of competition from Blockbuster and Wal-Mart. "We're impressed with the demand for our service at our new price points. Although it is still early in the quarter, subscriber growth is exceeding our earlier expectations, churn appears to be heading toward historical lows, and U.S. SAC should be in the neighborhood of last quarter," said Netflix CEO Reed Hastings. "The strategy of rapid subscriber growth we announced last month is working."
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http://biz.yahoo.com/ap/041118/netflix_stock_2.html
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