Netflix's Loss Widens

Following that transition quarter, however, the company said the price increase could allow it to maintain 42% to 45% gross margins and improve churn for the rest of 2004.

Looking to the second quarter, Netflix expects to earn $1 million to $3.5 million on a generally accepted basis, or $6.4 million to $8.9 million on a non-GAAP basis, with sales of $116 million to $120 million. The company expects total subscribers of 1.935 million to 2.14 million, with churn of 4.9% to 5.9%.

In full-year 2004, the company now expects revenue of $485 million to $535 million, up from a previous estimate of $480 million to $505 million. GAAP earnings are seen at $10.5 million to $18.4 million, up from a prior $4 million to $10 million estimate, while the company expects total subscribers to grow to 2.2 million to 2.7 million.

Analysts have forecast a profit of 16 cents a share in the second quarter and 50 cents a share in the full year.

Netflix said its guidance includes an estimated loss of about $7.5 million from its anticipated international expansion.