The Associated Press April 25, 2011, 6:43AM ET

Ahead of the Bell: Spotlight on Netflix 1Q results

Netflix Inc. will share the latest installment in its phenomenal growth story when it releases its first-quarter results after the stock market closes Monday.

The focus will be on how many more million people signed up for the home video subscription service as much as the company's earnings.

After starting the year with 20 million subscribers in the U.S. and Canada, Netflix predicted it would add another 2.6 million to 3.7 million customers by the end of March.

Netflix, which is based in Los Gatos, Calif., is becoming a household staple largely because of a video streaming library that shows movies and TV shows over high-speed Internet connections. A streaming-only subscription costs just $8 per month for unlimited viewing of more than 20,000 video titles. Most Netflix customers pay an additional $2 to $10 per month so they can also rent DVDs through the mail.

As its audience has swelled from 9.4 million subscribers since the end of 2008, Netflix has emerged as a Hollywood power broker and Wall Street darling. After tripling in value last year, Netflix's stock price already has surged more than 40 percent this year to give it a market value of $13 billion -- higher than some of the studios that sell it content. Netflix shares closed last week at $252.22.

Netflix's success already has attracted a formidable competitor in Amazon.com Inc., which recently started offering video streaming to online shoppers who pay $79 annually for free or discount shipping on the orders. Wal-Mart Stores Inc., Best Buy Co. and Dish Network Corp., which just bought the remnants of fallen video-store chain Blockbuster Inc., also have been mentioned as prime candidates to launch their own video-streaming services.

Analysts polled by FactSet expect Netflix to report earnings of $1.07 per share on revenue of $706 million.


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