Netflix beats estimates with higher Q4 profit

By Sue Zeidler

LOS ANGELES (Reuters) - Online DVD rental company Netflix Inc topped Wall Street estimates with higher fourth-quarter profits on Wednesday, but subscriber growth fell short of some analysts' forecasts.

Net income grew to $15.8 million, or 24 cents per share, up from $14.9 million, or 21 cents per share, in the same period a year earlier.

Netflix stock fell more than 2 percent to $23.20 a share in after-hours trading after closing up $1.45 a share, or 6.5 percent, at $23.76 a share.

Fourth-quarter revenue rose 9 percent to $302.4 million from $277.2 million for the fourth quarter of 2006.

Income, excluding items, totaled $17.8 million, or 27 cents a share for the fourth quarter of 2007. Analysts on average had forecast earnings, on that basis, to total 17 cents a share, according to Reuters Estimates.

Netflix ended the quarter with about 7,479,000 total subscribers, which was in line with its forecast, but below what some analysts had expected. The net subscriber change was an increase of 451,000. Some analysts had expected an uptick of more than 472,000.

"I'm surprised they didn't beat on the subs (subscribers)," said Wedbush Morgan analyst Michael Pachter.

JP Morgan analyst Barton Crockett said both Netflix fourth quarter earnings and its 2008 forecast topped his expectations, but the subscriber additions were a "hair" lighter than some models.