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January 26th, 2009 at 7:32 pm

Netflix 4Q profit up 45 pct, helped by recession

in: HD Movies, HD Players, News

netflix_profit Netflix 4Q profit up 45 pct, helped by recession

Netflix Inc.’s fourth-quarter profit climbed 45 percent to surpass analysts’ estimates Monday, propelled by the widening appeal of its relatively inexpensive DVD rental service during a budget-crimping recession.The results, along with an optimistic forecast for the current quarter, drove Netflix shares up by more than 6 percent in extended trading. The Los Gatos, Calif.-based company added 718,000 customers in the final three months of 2008, more than doubling the growth envisioned by management. The surge left Netflix with just under 9.4 million customers through December, a 26 percent gain from 2007.

What’s more, new customers flocked to Netflix even as the company spent substantially less to lure them. Netflix’s cost per new subscriber averaged $26.67 in the quarter, a 23 percent drop from the same juncture in 2007.

The ability to entice more subscribers at a lower cost helped Netflix earn $22.7 million, or 34 cents per share, in the fourth quarter. That compared with net income of $15.7 million, or 23 cents per share, at the same time in 2007.

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