Netflix, Amazon report strong third quarters
But companies' stocks see different reactions on Wall StreetIt doesn't pay to guess how Wall Street will react to good news in these economically troubled times.
Case in point: Netflix doubled its profit in its third quarter, raised its forecast, added more than a half-million subscribers, beat Wall Street's expectations -- and the stock promptly fell after Thursday's closing bell.
Then again, Amazon.com also reported stellar Q3 earnings on Thursday, and its stock surged as much as 16% in after-hours trading to $107 a share, its highest price in a decade.
Amazon.com even proved that allegedly old media like CDs and DVDs can still sell well. The company said its "media" sales rose 17% in the third quarter to $2.93 billion.
Granted, the growth lagged some other categories, but that didn't stop Goldman Sachs analyst James Mitchell from headlining a Thursday research report: "Broad-based beat; media evidently not mature."
Amazon said profit jumped 68% to $199 million on revenue that climbed 28% to $5.5 billion. It's stock was up fractionally Thursday to $93.45 before its big after-hours surge.
Amazon also said it expects big Christmas sales and that its Kindle digital book-reader is its best-selling product, though it didn't offer numbers.
At Netflix, profit advanced 48% to $30.1 million, and revenue was up 24% to $423.1 million.
The DVD-by-mail company added 510,000 subscribers, ending the quarter with 11.1 million subs, 27% more than it had a year ago. It said it will end the year with as many as 12.3 million, up from a previous forecast of 12 million.
Netflix shares were up 3.7% to $49.63 in the regular session before falling as much as 4% after the closing bell.
During a conference call with analysts Thursday, CEO Reed Hastings said that while streaming movies over the Internet is a huge growth opportunity internationally for Netflix, its traditional business of mailing DVDs to subscribers is not, due to "tricky" postal services in many countries.
He also praised as "very important efforts" Disney's Keychest initiative and the Digital Entertainment Content Ecosystem from a consortium of other studios. Both seek to simplify rights and technology issues in order to give consumers access to their collection of movies anywhere, any time, on a variety of devices.