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
NEW YORK (
TheStreet) -- Shares of
Netflix(NFLX - Get Report) 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.