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Vid rental biz shares’ gain

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.

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