Walmart's New Health Food Push: Is It Too Hard to Swallow?
Bonds Are a 'Safe' Investment: A Big Lie Gets Even Bigger
After losing more than 12% on Monday, Netflix (NASDAQ: NFLX) shares are down an additional 6% today, dropping to a new two-year low. Yesterday's plunge came as the company announced plans to reduce two of its monthly subscription plans by a dollar, dropping the most-popular $17.99 plan to $16.99 per month and reducing the single-disc $9.99 plan to $8.99. Good news for Netflix users, but potentially bad news for shareholders, as the move - at least initially - means a smaller bottom line. Last night after the closing bell, the company reported second-quarter income of $26.6 million, or 37 cents per share, a 50% increase from the previous year. Revenue improved by 27% to $303.7 million. Excluding items, NFLX would have banked 31 cents per share, easily topping analysts' expectations of 23 cents. But for the first time in the company's eight-year history, the total number of subscribers dropped. At the second quarter's conclusion, Netflix had 6.74 million subscribers, a net loss of 55,000 in the three-month reporting period. The equity was quickly trading lower in after-hours activity.
Then today, Netflix subscribers (such as myself) awoke to find our beloved site offline. The company's home page -- an intuitive work of website engineering that allows users to rate recent returns, rearrange queues, and share reviews with fellow subscribers -- crashed at some point Monday evening and is, as of 2:15 p.m. Eastern time, still unavailable.
I tend to visit Netflix almost every day, and when I went online earlier this morning, I was told it should be up and running by 9:00 a.m. Pacific time. Now they are aiming for 1:00 p.m. Pacific time, but I'm not holding my breath. According to Associated Press reports, a company spokesman said the outage was caused by an "unanticipated problem that he declined to describe." Well, that's perfectly clear.
On the heels of the price cut and earnings report that already have NFLX shares reeling, the timing couldn't be more inconvenient . Not to mention the fact that I've got a five-hour flight to Seattle on Friday and need to rearrange my queue to make sure airplane-friendly films are on their way. If I offend my seatmate by playing R-rated DVDs on my portable player, there will simply be no one to blame but Netflix.
Beth Gaston Moon is an analyst at Schaeffer's Investment Research.
On the heels of the price cut and earnings report that already have NFLX shares reeling, the timing couldn't be more inconvenient . Not to mention the fact that I've got a five-hour flight to Seattle on Friday and need to rearrange my queue to make sure airplane-friendly films are on their way. If I offend my seatmate by playing R-rated DVDs on my portable player, there will simply be no one to blame but Netflix.
Beth Gaston Moon is an analyst at Schaeffer's Investment Research.
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
Burberry Shares Leap on Sales Update
