This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Netflix Shares Shrug Off Postal Service Changes

NEW YORK ( TheStreet) -- Shares of Netflix (NFLX) rose Monday despite news that cutbacks at the U.S. Postal Service could lengthen first-class delivery times.

Shares of the DVD-by-mail and streaming content company advanced $3.75, or 5.7%, to $70.12, closing above $70 for the first time since Nov. 22.

Netflix is a huge customer for the U.S. Postal Service, spending roughly $600 million annually, according to the Associated Press. The company is emphasizing its streaming business but still counted 13.93 million DVD-by-mail subscribers vs. 21.45 million streaming subscribers at the end of the third quarter.

If the Post Office moves do create consistently longer turnaround times for Netflix customers, it could lead to consumers either dropping the service or switching to streaming subscriptions. This time around, perhaps because Netflix shares are down 60% this year already, investors didn't scramble out of the stock on the news.

Another factor could be that the Postal Service's proposed change for first-class delivery to a 2-to-3 day standard also comes with a caveat: " T here would be an opportunity for mailers who properly prepare and enter mail at the destinating processing facility prior to the day's critical entry time to have their mail delivered the following delivery day."

The Postal Service, which officials said needs to reduce operating costs by $20 billion by 2015 in order to return to profitability, estimated the changes proposed on Monday would generate annual savings of $2.1 billion. The changes include the possible closure of 252 of the Postal Service's 487 mail processing facilities.

Netflix is facing widespread skepticism on Wall Street with 28 of the 34 analysts covering the stock at either hold (19), underperform (6) or sell (3). The current consensus estimate is for the company to report a profit of 57 cents a share in its fiscal fourth quarter ending in December on revenue of $858.6 million.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,265.99 +109.14 0.64%
S&P 500 2,011.36 +9.79 0.49%
NASDAQ 4,593.4250 +31.2360 0.68%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs