Netflix (NFLX-NASDAQ) stock is indicated down in initial trading after the company’s earnings. The online and mail in video rental leader posted non-GAAP EPS at $0.16 vs $0.16 estimates and posted revenues of $305.3 million vs estimates of $305 million.
GUIDANCE: NFLX sees 6.7-6.9 million subs in Q2 on revenues of $303-309million (versus $315.5 million estimates), and $0.18-0.24 GAAP EPS. Itsees 2007 7.3 to 7.8 million subscribers (down from 8.0 to 8.4M priorguidance) on revenues of $1.21-1.26 Billion (down from prior $1.25 to1.3 Billion) and sees 2007 GAAP EPS $0.76-0.83 (unchanged from priorguidance).
METRICS: It ended with 6.797 million subscribers, 97% of which are paying. It added 481,000 subscribers in the quarter; subscriber acquisition costs rose more than 6% from Q4 2006 and its churn rates grew from 3.9% in Q4 2006 to 4.4% for Q1 (Q1 2006 churn was only 4.1%).
The company has also authorized up to $100M for share buybacks in 2007.
So far it is trading down almost 10% pre-market around $21.70; its 52-week trading range is $18.12 to $33.12; market cap including today’s drop is roughly $1.5 Billion. On the surface, this is a maturing company whose growth story is really beginning to slow: costs to by customers rising, churn rates up, lower subscriber growth, lower revenue growth, higher competition……..
Jon C. Ogg
April 18, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
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