Netflix Recovering Nicely from 2011 Gaffes
Netflix issued its fourth-quarter results Wednesday, showing it has begun recovering from the blunders that caused it to lose customers last year. The company said it gained 610,000 US customers during the fourth quarter, and now has a total of 24.4 million subscribers in all, just 200,000 less than it had when it angered customers and damaged its reputation with a 60 percent price hike in July and the announcement of a plan to spin off its DVD service in September. The company eventually abandoned the spinoff plan, but not before losing 800,000 customers.
Based on its latest quarterly results, Netflix appears to have recovered from last year's public relations nightmare. In the final three months of 2011, the company earned $40.7 million, or 76 cents a share, down 13.5 percent from the same period a year earlier. Sales rose 47 percent, however, to $875.6 million. Analysts taking part in a recent Bloomberg survey were expecting earnings of 55 cents a share on revenue of $858 million.
As for the current quarter, Netflix said it expects that overall sales will be about the same as last quarter, exceeding analysts' expectations for its sales by about $30 million. As the company had previously announced, it expects to post "modest" losses in the first few quarters of 2012 due to charges related to launching its service in the UK and Ireland earlier this month. The company said it will lose between $9 million and $27 million this quarter, the median of which would be slightly lower than analysts expectations for a $16.5 million loss.
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