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UPDATE: Netflix Still In Deal-Making Mode; Beats Street Expectations for 1st-Q But Stock Price Dips In After-Market Trading

UPDATE: Netflix CEO Reed Hastings in today’s earnings call says the company’s much-ballyhooed deal to license the original TV series House of Cards is merely a test — and a relatively modest one at that. “I don’t know if it’s anything we’d bet the farm on, but we’re willing to try it with a little bit of our budget,” he told Wall Street analysts. He said in a letter to shareholders that Netflix might make “two or three similar, but smaller, deals” to see whether “we can efficiently build a big audience for a well-produced serialized show.” He said, in his note, that the characterization of Netflix as “rerun TV” is “fundamentally correct.”

Hastings told analysts, though, that he was intrigued by the performance of Starz’ Spartacus, which was also available on Netflix. It “opened our eyes” to the possibility that a show might develop a bigger buzz, and more TV viewers, when it runs on the Web as well as conventional TV. Meanwhile, Hastings says that Netflix is “working hard” to offer its streamed content to Android-powered smartphones and tablet computers. “It’s a big priority for us.” As for the competition in Web-delivered video, Hastings says he’s as eager as anyone to see what his rivals have planned. “We really don’t know what Dish (Network) is up to” with its acquisition of Blockbuster,” he adds. “A big market attracts a lot of competition.”

PREVIOUS, 1:30 PM: Netflix continues to strengthen the sense of inevitability that it will become a must-have service for Web users who want to watch professionally produced entertainment. It said Monday that it ended the first quarter with a net profit of $60 million, up 88% vs. the same period last year, on revenues of $719 million, up 46%. That comes to $1.11 in earnings per share. In January the company told investors that revenue could go as high as $717 million while earnings would come in between 90 cents and $1.13 a share. Even though Netflix often beats its own guidance, analysts considered that ambitious: The consensus was $703.6 million and $1.08.

Most underestimated Netflix’s appeal to the fast-growing number of people watching movies and TV shows via broadband. It had 23.6 million global subscribers at the end of March, a gain of 3.6 million so far in 2011 and close to the 23.7 million at the top of the target range it set for itself in January. That makes Netflix the largest subscription entertainment service, surpassing Comcast’s 22.8 million subscribers and Sirius XM’s 20.2 million. Some 22.8 million of Netflix’s customers are in the U.S. Now the company says it expects to have as many as 25.9 global million subscribers at the end of June. It projects second quarter revenues of as much as $798 million, and earnings per share as high as $1.15. Read More »

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Spendy Launch Of The Hub Network Hurts Hasbro Earnings

The Hub, Hasbro’s joint-venture kids network with Discovery Communications that launched in October, didn’t do much for the toymaker’s first-quarter earnings announced today. Although Q1 is usually a slow time for toys as it comes after the holidays, the company missed Wall Street expectations as it reported its net income fell 71%, from $58.9 million a year ago to $17.2 million. Costs related to launching The Hub were cited as part of the dragging-down. The bright side is that Hasbro has a slew of toys tied to summer tentpole movies like Marvel properties Thor and Captain America: The First Avenger and Transformers: Dark of the Moon, which are expected to goose revenue for the full year.

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NBC-Universal Sees Stronger Q4 Results

By | Friday January 21, 2011 @ 8:21am PST

While the Comcast-NBC Universal deal is supposed to close next week now that it has received FCC approval, NBCU’s fourth quarter revenue rose to $4.8 billion (up 12%), and profit saw a 38% gain to $830 million powered by a Big Media-wide advertising rebound that boosted the bottom line across the company. NBC-Universal’s quarterly and yearly performance was announced as part of the latest General Electric results. GE boss Jeff Immelt called the strong fourth quarter “a pretty good precursor” for 2011, citing the bounce-back in the economy as a main factor for continued growth. “The environment continues to improve,” he said. “We think the economy can get a little stronger every day.” GE will give up its majority stake in the company when the Comcast deal closes next Friday but its bottom line still will be affected. For NBCU, the cable and broadcast sides were strong: Cable revenues grew 15%, and the broadcast side’s revenues grew 11%. Even though the quarter was robust, the year was still saw, as profit stood at $2.26 billion. NBC-U’s parent company, General Electric, posted net earnings of $4.46 billion, up from $2.94 billion last year. Quarterly revenues were almost flat at $41.4 billion. GE does expect a heavy tax rate in 2011, due to gains from the sale of NBC-U to Comcast. Immelt himself has a new additional role: he’s just been named by President Obama to head the new White House Council on Jobs and Competitiveness.

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