("Netflix 1Q Net Soars 87% On Strong Rev; 2Q EPS View Weak," published at 4:23 p.m. ET, failed to clarify several metrics that focused only on U.S. data in the fourth and fifth paragraphs. A corrected version follows.)
Netflix Inc.'s (NFLX) first-quarter profit soared 87% as the online movie rental company reported a sharp jump in revenue and higher gross margins, while subscriber acquisition costs fell by a third.
But shares fell 2.6% to $245.34 in after-hours trading, as the company issued a weak earnings outlook for the current quarter. Still, the stock is up 43% this year through Monday's close, and reached an all-time high of $254.98 during the regular session.
For the second quarter, Netflix projected earnings of 93 cents to $1.15 a share on combined global revenue of $778 million to $798 million. Analysts polled by Thomson Reuters expected $1.19 and $763 million, respectively.
U.S. subscriber acquisition costs, a metric closely watched by investors, fell 33%. The churn rate in the U.S.--a measure of customer cancellations and free subscribers--grew to 3.9% from 3.8% a year ago.
Meanwhile, the company said it ended the quarter with 22.8 million U.S. subscribers, up 17% sequentially and 63% higher than a year earlier. Globally, Netflix had 23.6 million subscribers, up 69% on year.
The company has consistently reported higher profits as it attracts subscribers and expands its library to compete with DVD kiosks and new digital players. And while Netflix's online streaming product has been wildly popular with consumers, there are some concerns about the cost of adding movies and TV shows for streaming.
Netflix posted a profit of $60.2 million, or $1.11 a share, up from $32.3 million, or 59 cents a share, a year earlier. Revenue surged 46% to $718.6 million.
In January, the company predicted profit of 90 cents to $1.13 a share on revenue of $684 million to $704 million, a view that topped analysts' then expectations.
Gross margin widened to 39% from 37.8%.
-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com