for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up

UPDATE 2-Netflix posts higher fourth-quarter profit

 * Company outperforms revenue, subscriber growth targets
 * Streaming is 'energizing our growth'-CEO
 * Shares rise 7 percent in after-hours trade
 (Recasts first paragraph with costs, streaming growth; adds
analyst comment, forecast; adds byline)
 LOS ANGELES, Jan 26 (Reuters) - Netflix Inc NFLX.O, the
top U.S. online DVD rental company, posted higher quarterly
profit on Monday from lower costs and growth in its Internet
streaming service.
 The company also forecast 2009 year revenue and earnings
that straddled Wall Street estimates.
 The company's share price jumped more than 7 percent in
after-hours trading.
  "It's very clear that streaming is energizing our growth,"
Netflix Chief Executive Reed Hastings said on a conference call
with analysts.
 Netflix saw its margins expand in the quarter as marketing
costs dropped by nearly 23 percent and cancellations held
steady.
 "Subscriber growth and the lower cost of customer
acquisition were the headlines this quarter," Jefferies & Co
analyst Youssef Squali said. "Margin growth should be
sustainable but the drop in (subscriber acquisition costs) is
not likely longer term as online advertising starts
rebounding."
 Net income for the fourth quarter rose to $22.7 million, or
38 cents per share, from $15.7 million or 23 cents per share in
the previous year's fourth quarter. On an adjusted basis,
earnings grew to 41 cents per share.
 Revenue increased 19 percent to $359.6 million from $302.4
million a year earlier.
 Analysts on average expected fourth-quarter net earnings of
34 cents per share, adjusted earnings of 37 cents per share,
and revenue of $354.2 million, according to Reuters Estimates.
 "The quarter was exactly what we expected," Wedbush Morgan
analyst Michael Pachter said. "The subscriber numbers came in
higher than I expected, average revenue per user (ARPU) lower
than I expected. That could be attributable to people joining
late in the quarter...because the Xbox 360 partnership rolled
out in late November."
 The company had forecast revenue of $351 million to $357
million and net earnings of 30 to 38 cents per share.
 Subscriber growth in the quarter of 26 percent resulted in
an ending subscriber base of 9.4 million, far exceeding
Netflix's forecast for ending subscribers of up to 9.15
million.
 Netflix expects to end the first quarter with 10.1 million
to 10.3 million total users, and finish off the full year of
2009 with 10.6 million to 11.3 million total subscribers.
It forecast first-quarter net earnings of 25 cents to 33
cents per diluted share and fiscal year 2009 net earnings of
$1.43 to $1.59 per diluted share.
 Wall Street was expecting first-quarter net earnings of 30
cents per share and fiscal year net earnings of $1.49 per
share.
 In the fourth quarter, Netflix's gross margins expanded to
35.2 percent from 33.8 percent a year ago as its subscriber
acquisition costs plummeted.
 Subscriber acquisition, or marketing, costs fell to $26.67
per gross subscriber addition, compared to $34.58 for the same
period last year.
 Churn, or cancellations, were up slightly, to 4.2 percent,
compared to 4.1 percent a year earlier.
 Shares of Netflix jumped about 7 percent higher in
after-hours trade to $32.30, after closing down nearly 1
percent, at $30.15 on Monday on Nasdaq.
 (Reporting by Gina Keating; editing by Carol Bishopric)


for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up