Netflix Takes A Breather (NFLX)

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Netflix, Inc. (NASDAQ: NFLX) is seeing some share punishment after-hours.  The monthly mail rental DVD operation posted $0.21 EPS net EPS and $0.23 non-GAAP EPS on $326.2 million in revenues.  First Call had estimates at $0.21 and $326.87 million.

The company also put 2008 GAAP EPS guidance at $1.16 to 1.29 EPS and revenue guidance at $1.35 to $1.39 Billion.  Its prior guidance had been $1.18 to $1.30 EPS and $1.34 to $1.385 Billion.  First Call had estimates for 2008 at $1.25 EPS (but non-GAAP) on $1.37 Billion in revenues.

It ended with 8.24 million subscribers in March and it sees 2008 subscribers being 9.1 to 9.7 million subscribers, up from 8.9 to 9.5 million.

Its gross margin has also come down to 31.7% (versus 36.1% last year’ Q1) and subscriber acquisition costs came in at $29.50, while subscriber acquisition costs were $47.46 in Q1-2007 and $34.60 in Q4-2007.

Shares closed up almost 2% after Wedbush Morgan lifted the target, but shares are now down 11% at $34.89.  Its 52-week trading range is $15.62 to $40.90.

Jon C. Ogg
April 21, 2008