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Netflix registers first profit

Co. sees revs rise 74% to $63.2 million

Netflix, the Internet-based home-video rental service, earned $3.31 million in the second quarter, its first profit ever.

The profit, which fell short of the highest analyst estimate, compared with a loss of $13.1 million a year earlier.

Revenue at the Los Gatos-based company rose 74% to $63.2 million.

Netflix customers, who pay a fixed monthly price to rent DVDs, increased 71% to 1.15 million at the end of June from a year earlier.

Company had higher depreciation expenses to write down the value of DVDs it owns.

Netflix shares slipped 20¢ to $25.28 Thursday on the Nasdaq Stock Market. They’ve more than doubled this year.

Service’s customers may order three films at a time over the Internet; the DVDs are delivered and returned by mail, with no postage or late fees. As Netflix has grown, larger rivals such as Wal-Mart and Blockbuster, have targeted the market Netflix pioneered.

Wal-Mart, the world’s largest retailer, started an online DVD-rental service in October. Blockbuster, the world’s largest videostore chain, is test-marketing a fixed monthly price for unlimited video rentals.

Netflix first sold shares to the public in May 2002.

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