Netflix profit rises but stock falls

Netflix Inc.’s first-quarter profit climbed 36% amid accelerating subscriber growth, but the online DVD leader spooked investors by warning that its recent momentum will taper off dramatically during the next few months.

The tepid outlook provided Monday caused shares of Los Gatos, Calif.-based Netflix to plunge nearly 13% in after-hours trading.

Netflix said it earned $13.4 million, or 21 cents a share, during the first three months of the year. That compared with net income of $9.9 million, or 14 cents, a year earlier. Revenue rose 7% to $326.2 million.

The earnings matched the average estimate among analysts surveyed by Thomson Financial.

Netflix ended March with 8.24 million subscribers, a gain of 764,000 customers during the first three months of the year. In the same period last year, Netflix picked up 481,000 subscribers.

Although the first-quarter numbers indicate that Netflix widened its lead over rival Blockbuster Inc., the company expects it to be more difficult to attract customers in the current quarter.

In another move that raised alarm, Netflix shaved a penny off the upper end of its full-year guidance to $1.29 a share.

Netflix shares fell $5.02, or 12.8%, in extended trading after finishing the regular session at $39.32, up 76 cents, or 2%. The stock price had surged by nearly 50% this year before Monday’s late backlash.