Netflix forecasts Q1 loss on international investments

Internet movie rental company Netflix posted fourth quarter revenues of USD 876 million, up 47 percent year-on-year, ahead of its forecast of USD 841-875 million. Net income was USD 41 million, down 13 percent, but beating its forecast of USD 19-37 million due to out-performance of domestic streaming contribution profit. Netflix ended the quarter with 21.67 million streaming customers in the US and 1.86 million international streaming subscribers after adding 220,000 domestic customers and 380,000 international customers in the quarter. Domestic DVD customers fell by 2.76 million to 11.17 million in total. For Q1, Netflix forecasts a loss of between USD 9 and 27 million due to the increased investment in international services, in particular the launch of UK services. While contribution profit from domestic streaming will grow sequentially, it will not be sufficient to offset the sequential decline in DVD profits, and the sequential increase in international losses, as well as cover global G&A and technology & development costs. As a result, the company expects modest quarterly losses as well as losses for the calendar year. Until Netflix achieves its goal of returning to global profitability, it does not intend to launch additional international markets.