Netflix: What Recession? Q4 Beats Estimates, 2009 Looks Strong
by Peter Kafka
Posted on January 26, 2009 at 1:15 PM PT
Here’s another company that looks to be resistant to the recession and may even be benefiting from it: Netflix (NFLX) says it did very well at the end of 2008 and predicts a gangbusters 2009.
The company predicted that it would have 10.1 million to 10.3 million subscribers by the end of March, and 10.6 million to 11.3 million by the end of the year. Those numbers trump consensus expectations of 9.6 million and 10.3 million, respectively.
The rest of the company’s guidance was also strong: Netflix beat expectations with its predictions for Q1 and full-year revenue and earnings per share.
The company had already tipped its hand about its Q4 results when it told investors that it had “a remarkably strong quarter,” so those numbers aren’t that important in Wall Street’s eyes. For what it’s worth, the company posted earnings of 38 cents per share on revenues of $359 million versus expectations of 34 cents a share and $354 million.
“Consumers embraced the Netflix experience in near record numbers last quarter,” said CEO Reed Hastings, “with growth in our core DVD offering and growing momentum with internet streaming.”
Investors have been betting for quite some time that Netflix would be able to weather a recession, and even thrive during one, as consumers hunker down in front of their flat screens instead of spending money on more expensive entertainment. And they’re also hopeful about the strides the company had made toward delivering movies via broadband–a technology that so far flummoxed rival Blockbuster (BBI).
I’ll be listening to the company’s earnings call, which begins at 5 p.m. Eastern time, and will update this post if there’s anything particularly illuminating.
Here’s Citi (C) analyst Mark Mahaney’s helpful “cheat sheet” if you want to evaluate the results on your own (click to enlarge):
[Image Credit: jeknee]
