Bad Rumors: Netflix Action Adventure, Cuts at Cisco, Google
The demand for entertainment isn't dead just because consumers want to save money. Just look at Netflix ( NFLX). The company saw a 22% increase in second-quarter earnings, as it gains market share in the movie rental business. During the quarter, the company earned $32.4 million, or 56 cents a share, compared with $26.6 million, or 43 cents, in the year-ago period. Revenues jumped 21% to $408.5 million from $337.6 million last year, as consumers look to inexpensive ways to entertain themselves at home.
Netflix ended the second quarter with about 10.6 million total subscribers, a 26% increase from last year. And the company isn't stopping with movie rentals. Earlier in the month, Netflix said it plans to stream movies to Sony's ( SNE) Bravia high-definition, Internet-connected TVs starting this fall. The move marks Netflix's goal to gain market share in Internet streaming. Looking ahead, management expects third-quarter earnings in the range of 39 cents to 47 cents a share, and full-year profit between $1.65 and $1.82 a share. The company has been doing so well, in fact that there have been rumors circulating that Amazon.com ( AMZN) or Microsoft ( MSFT) could be
interested in acquiring the company. Analysts, however, say this is doubtful. Shares of the company jumped 3% to $46.46 in late day trading.