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Last Wednesday, NetFlix Inc. (NASDAQ: NFLX), the leader in mail-service DVD rentals, reported first-quarter earnings that missed analysts' expectations. Citing increased competitive pressure from Blockbuster (NYSE: BBI), the company reduced its outlook for subscriber growth, calling earlier hopes for 20 million subscribers by 2012 "unattainable" if BBI maintains its current pricing structure. NFLX failed to adjust its earnings guidance, but said revenue could hit $1.26 billion, down slightly from an earlier target of $1.3 billion.

Obviously self-satisfied, a spokesman for BBI was quoted on Bloomberg as noting that, "NetFlix obviously sees us as a formidable competitor because of the superiority of our offering." BBI expects its subscriber base to rise by more than a third, to three million customers.

NFLX shares gapped nearly 10% lower on the heels of this news and have not yet begun to recover, in terms of price action, though the stock is still hovering above chart support at the $20 level.

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Can Netflix recover from disappointing earnings? originally appeared on BloggingStocks on Mon, 23 Apr 2007 11:00:00 EST. Please see our terms for use of feeds.

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