EmptyNetflix slides on reduced forecasts
Netflix Inc. lowered its revenue and subscriber growth forecasts for the year Wednesday, sending its shares down 9.4% to $21.70 as the No. 1 online DVD rental company begins to feel the heat of rising competition from Blockbuster Inc. Netflix also reported lower-than-expected first-quarter net income and subscriber additions. Revenue for Netflix rose 36% to $305.3 million as it earned $9.9 million, more than double the net income recorded in the same quarter last year. Netflix ended the quarter with 6.79 million subscribers and said it will end the year with up to 7.8 million subscribers, down from previous guidance of up to 8.4 million. CEO Reed Hastings also said his long-term goal of 20 million subs by 2012 is in doubt. Netflix was the second-biggest loser Wednesday on The Hollywood Reporter's Showbiz 50 stock index.
Earnings reaction: Yahoo! plunges
Shares of Yahoo! Inc. tumbled 12% in heavy trading Wednesday, though several analysts tepidly defended the company after Tuesday's announcement that first-quarter earnings declined 11%. Piper Jaffray analyst Gene Munster restated his "market perform" rating and $30 price target for Yahoo! saying that the company is taking the right steps to fix issues it encountered last year by shuffling its management and concentrating on projects that increase its appeal to young customers. Susquehanna Financial Group analyst Marianne Wolk restated her "positive" rating, predicting things will look up for Yahoo! in the second half. The stock sank $3.78 to $28.31, the biggest loser on THR's Showbiz 50.