Stocks fast-forward on Movie Gallery results
HOLLYWOOD — Wall Street is feeling bullish about the video rental biz in the third quarter.
On Wednesday, No. 3 vidtailer Movie Gallery said higher-than-expected revenue for the quarter ended Oct. 5 would push net earnings per share to at least 29¢, compared with the company’s earlier estimate of 25¢-27¢ per share.
Revenue at stores open at least a year jumped 5% in the quarter, compared with earlier estimates of low-single-digit comps. Company operates 2,050 stores.
News sent shares of Movie Gallery up 7.15% to close at $22.02 Wednesday. Company will release full financial results for the third quarter Nov. 4.
Though not normally considered a bellwether, announcement by Movie Gallery lit a fire under other vidtailer stocks Wednesday.
Blockbuster up 3.4%
Shares of Blockbuster closed up 3.4% at $22.43, while No. 2 chain Hollywood Video closed up 2.42%, to $17.81.
Hollywood is scheduled to release its third-quarter results next week. In July, the company projected net income would grow 12% in the third quarter.
Blockbuster will release third-quarter earnings next month. In August the company said it expected “gross profit dollars” in the third quarter to be up in the high single-digits, while same-store sales would be flat.
Netflix stock dips
Shares of Netflix, the online DVD rental service, were unaffected by Movie Gallery’s announcement, dropping 1.6% on the day. Company will release its third-quarter results next week.
Last week, Netflix announced a 74% increase in subscribers for the third quarter, well ahead of expectations, sending its shares up 11% on the day.
Shares of Netflix have more than doubled since April.