BUSINESS BRIEFS
Netflix reports 3rd-quarter profit up 30 percent
Associated Press
SAN FRANCISCO Netflix Inc.'s third-quarter profit surged 30 percent amid slowing subscriber growth that's turning into a bigger problem for the online DVD rental leader as the rapidly unraveling economy prods more consumers to clamp down on entertainment expenses.
To help boost its revenue, the Los Gatos-based company said yesterday that it will begin charging about 500,000 subscribers $1 more per month to rent high-definition DVDs made for Blu-ray players. The surcharge becomes effective Nov. 5.
Netflix earned $20.4 million, or 33 cents per share, for the three months ending in September, compared with $15.7 million, or 23 cents per share, in the year-earlier period.
Revenue rose 16 percent to $341 million, from $294 million last year.
Analysts polled by Thomson Reuters had projected a profit of 31 cents per share on revenue of nearly $343 million.
ECONOMY RALLIED IN SEPTEMBER
NEW YORK The economy's health improved for the first time in five months in September as supplier deliveries and new orders strengthened, a private research group said yesterday.
The New York-based Conference Board said its monthly forecast of future economic activity rose 0.3 percent, a better reading than the 0.2 percent drop expected by Wall Street economists surveyed by Thomson/IFR.
The index had fallen a revised 0.9 percent in August and 0.7 percent in July.
MATTEL, HASBRO WARY OF DOWNTURN
NEW YORK Both Barbie maker Mattel Inc., the world's largest toy retailer, and rival Hasbro Inc. said as they announced third-quarter results yesterday that price increases are helping to offset rising costs, but noted that they could be hurt by the severity of the economic downturn.
Yesterday, Mattel posted a slightly higher third-quarter profit that still fell short of analyst expectations. Hasbro said its net profit declined, but said sales of its Star Wars, Playskool and Nerf toys helped boost third-quarter profit and sales above Wall Street expectations.
GAS PRICES DROP FURTHER BELOW $3
NEW YORK Consumers got another break at the gas pump yesterday, as prices dropped further below $3 a gallon and approached year-ago levels even as the near-certainty of an OPEC production cut pushed oil prices marginally higher.
Gasoline has fallen more than a dime a gallon since Friday, hitting a national average of $2.92 yesterday, according to auto club AAA, the Oil Price Information Service and Wright Express.
Pump prices have fallen 29 percent from their July record high of $4.114 a gallon and are only 10 cents higher than a year ago. That difference could be bridged this week if gasoline keeps falling at the current rate.
AMEX REVENUES SLIDE 24 PERCENT
NEW YORK American Express Co. said yesterday its profit fell 24 percent in the third quarter as cardholders restrained their spending and had more trouble paying down debt.
The results were better than anticipated, and propelled AmEx's shares higher.
Still, the company's report echoed other recent results showing that the credit-card environment is worsening even for companies like American Express that pride themselves in catering to more well-heeled borrowers.
The credit-card issuer said net income was $815 million, or 70 cents a share, in the July to September period, down from $1.07 billion, or 90 cents a share, in the same timeframe last year.
