Netflix’s first-quarter profit climbed 36% amid the largest subscriber gains in the online DVD rental service’s 10-year history, but a projected slowdown overshadowed the performance.
Netflix earned $13.4 million during the first three months of the year compared with net income of $9.9 million during the same period in 2007.
Revenue rose 7% to $326.2 million from $305.3 million.
Netflix ended March with 8.24 million subscribers, a gain of 764,000 from the end of 2007. That’s the biggest influx of new customers in any quarter since the Los Gatos-based company set up its DVD rental service.
But management anticipates only 60,000-260,000 more customers will sign up during the current quarter, ending in June.
Netflix shares plunged $5.52 in extended trading after the forecast to finish Monday’s regular session at $39.32, down 14%.
Netflix projects more robust growth toward the end of the year. It anticipates entering 2009 with as many as 9.7 million subscribers, up from its previous forecast of 9.5 million.
Chief exec Reed Hastings said Monday that Netflix plans to raise Blu-ray rental fees later this year by a modest amount to defray higher costs associated with the high-def discs. He also said that three consumer electronics companies will sell devices designed to make it easier to stream Netflix’s digital service on televisions; that service is expected to launch in the fourth quarter. Netflix previously announced its partnership with LG Electronics; he did not name the company’s newest partners.