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Netflix's second-quarter profit rose 22% as the No. 1 U.S. movie-rental service via mail used its video-streaming offering to grow its subscriber base to the high end of its April forecast. Shares of the company fell slightly after hours as the company lagged analysts' revenue estimates.
Net income was $32.4 million, or 54¢ a share, from $26.6 million, or 42¢, a year earlier, as sales rose 21% to $408.5 million, Netflix said in a statement today. The company, which widened its subscriber base from a year earlier by 26% to 10.6 million, was expected to earn 50¢ a share on $409.7 million in sales, the average analyst estimate in a Thomson Reuters survey.
Netflix has been augmenting its by-mail service with its video-streaming product and has signed agreements to make its digital titles playable on a broader number of electronic components. The company earlier this month said its digital titles will be playable on Sony Bravia high-definition TVs. Netflix reached similar agreements for Samsung home theater systems, and LG Electronics TVs and Blu-ray players during the quarter.
Still, the company, which spends about half of its cost of goods sold on postal shipments, is looking to cut that number down to a third as a higher percentage of its subscribers switch to streaming, Hastings said today.