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Technology Stocks : Netflix (NFLX) and the Streaming Wars -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (126)	10/14/2004 9:50:16 PM
From: Glenn Petersen	Respond to of 2280

Amazon. Makes a lot of sense. story.news.yahoo.com Netflix Stock Drops on Amazon News Business - AP LOS GATOS, Calif. - Shares of mail-order DVD rental company Netflix Inc. plunged Thursday after it warned that it was slashing its subscription price in anticipation of Amazon.com Inc. entering an already crowded market. In after-hours trading, Netflix share price fell more than 35 percent, or $6.18, even after it announced it had posted its most profitable quarter. The company's stock traded up 8 cents a share at $17.43 Thursday on the Nasdaq Stock Market. "We recently learned from several sources that Amazon is likely to enter our market soon," Netflix chief executive Reed Hastings said during a conference call with analysts. Hastings didn't specify who the sources were. Netflix also announced it was cutting its monthly fee from $22 a month to $18. The company had earlier this year raised its fees from $20 to $22. The company also said it was temporarily halting its expansion plans into the United Kingdom to confront the expected challenge from Amazon, which declined to discuss its mail-order plans in detail. "Our customers have encouraged us to offer low-priced online DVD rentals, but we have no announcements to make at this time," Amazon spokeswoman Patty Smith said Wal-Mart Stores Inc. and Blockbuster Inc. have already launched similar mail order DVD services. For the three months ended Sept. 30, Netflix reported earnings of $18.9 million, or 29 cents per share, compared with $3.3 million, or 5 cents per share in the year-ago quarter. Revenue for the period was $141.6 million, almost double the $72.2 million posted last year. Excluding the amortization change, profit totaled $14.9 million, or 23 cents per share. Adjusted income was $22.6 million, or 35 cents per share, compared with $6.1 million, or 10 cents per share in the year-ago period. Excluding the changes, adjusted income was $18.6 million, or 29 cents per share. Analysts surveyed by Thomson First Call predicted earnings of 32 cents per share on revenue of $140.6 million for the period. Netflix ended the quarter with about 2.2 million subscribers after having acquired 590,000 new trial subscribers during the period. In last year's quarter, the company acquired 383,000 new trial subscribers. Looking forward, Netflix said it anticipates an increasingly competitive market in the coming year.