Netflix Finds Itself in House of Business Horrors

Despite profit growth, flurry of grim news troubles Wall Street
By Wesley Oliver,  Newser Staff
Posted Jul 24, 2007 4:44 PM CDT
Netflix Finds Itself in House of Business Horrors
This photo provided by Netflix shows Dennis Quaid and the Sharks performing during Netflix Live! On Location, Thursday, June 21, 2007, in New Orleans. Netflix is hosting a free concert followed by a screening of "The Big Easy" as part of their national summer series. (AP Photo/Netflix, Susan Goldman)   (Associated Press)

Netflix faced a second wave of bad news today as its stock price plummeted and its website remained inaccessible to visitors. The company announced price cuts Sunday and yesterday absorbed a triple blow: lowered sales expectations, a subscriber decline, and a Wall Street downgrade. The website crash then left the company's signature interface offline for nearly 24 hours.

Netflix was buoyed when profits beat expectations from analysts bearish on the company’s prospects against Blockbuster, which allows customers to return DVDs in person. Revenue rose 27% and net income increased to $25.6 million, but one analyst changed his rating from “buy” to “hold.” The company that invented the DVD-by-mail business is mulling plans to deliver movies digitally. (More Netflix stories.)

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