Netflix profit nearly triples, but shares fall 20 percent
Netflix Inc.’s second-quarter profit nearly tripled as the online DVD rental leader continued to lure thousands of new subscribers, but the company’s shares plummeted by more than 20 percent amid concerns about tougher competition.
The Los Gatos, Calif.-based company said Monday that it earned $16.8 million, or 24 cents per share, for the three months ended in June. That compared with net income of $5.7 million, or 9 cents per share, at the same time last year.
The results topped the average estimate of 18 cents per share among analysts surveyed by Thomson Financial.
Revenue for the period totaled $239.4 million, slightly below analyst expectations and 46 percent the comparable figure for last year.
•Kraft Foods Inc., the world’s second-largest food company behind Nestle SA, said Monday its second-quarter profit climbed 44 percent from a year ago, boosted by the benefits of more advertising and cost savings from its ongoing restructuring.
The maker of Kraft cheese, Oscar Mayer hot dogs and Oreo cookies, which ousted Chief Executive Roger Deromedi last month, also raised its full-year guidance. It cited a projected one-time gain related to its pending $1.07 billion acquisition of the Spanish and Portuguese units of United Biscuits along with the timing of restructuring costs.
Net earnings for the three months ended June 30 were $682 million, or 41 cents per share, up 44 percent from $472 million, or 28 cents per share, a year earlier.
•Shares of Merck & Co. and Schering-Plough Corp. jumped Monday as both reported higher sales and much-improved bottom lines compared with a year earlier, when they had hefty charges and Schering posted a loss.
The New Jersey pharmaceutical companies, struggling with slumping sales and profits and other problems for a couple of years, each beat analysts’ forecasts by a whopping 8 cents per share, and Merck significantly raised its profit forecast for the year.
Both benefited from higher sales of key medicines, particularly the cholesterol drugs they jointly developed and sell, Vytorin and Zetia. And each company saw its shares jump at least 4 percent Monday.
Schering-Plough shares rose $1.10, or 5.7 percent, to close at $20.55 in trading on the New York Stock Exchange. Over the past year, the shares have traded between $17.88 and $22.53.
Merck shares rose $1.59, or 4.3 percent, to $38.95 on NYSE, topping its 52-week high by $1.32.