Online DVD rental service Netflix announced Monday that net income for the first quarter was up 36 percent year over year, due in part to an increase in its subscriber base.
Netflix reported it had 8,243,000 total subscribers at the end of the quarter, which closed March 31. That's a 21 percent increase over the same period last year. First-quarter revenue was $326.2 million, up from $305.3 million for the same period last year. GAAP net income was $13.4 million, compared with $9.9 million in the first quarter last year--a 36 percent rise.
The company increased its 2008 forecasts for subscribers, expecting up to 9.7 million subscribers by year's end, compared with a previous forecast of up to 9.5 million. Netflix also slightly raised its revenue forecast to up to $1.39 billion, compared with the previous expectation of up to $1.385 billion. However, the company lowered its forecast for GAAP earnings per share. It now expects $1.16 to $1.29 per diluted share, compared with its previous forecast of $1.18 to $1.30 per diluted share.
According to MarketWatch, Netflix Chief Financial Officer Barry McCarthy told analysts that drop is due to higher-than-expected costs of building out its growing movie-download service. That service came online last summer, allowing customers to watch a few movies and TV shows online each month. But Netflix continues to add more movies to its Watch Instantly service and has shifted to an to better compete with other video-on-demand services.