Rentals, retail, and rate reductions ruled the past week -- along with the overall mess in the markets.
Nothing but Netflix
The trading week got off on the wrong foot, after Netflix
The DVD rental company didn't miss by much. With 8.672 million members at the end of September, Netflix will fall short of its original target -- between 8.675 million and 8.875 million subs -- by a mere 3,000 film buffs.
However, Netflix typically lowballs its guidance, a conservative strategy that makes it even sweeter when the company blows skeptics away. That didn't happen this time, and the company's fourth-quarter projection is considerably lower than its original outlook.
Wasn't Netflix supposed to be recession-resilient? With the economy's hard knocks, aren't more people staying at home with their DVD players? They are. Netflix is still growing. But in this case, a company that typically sets the bar low on purpose has decided to compete at limbo instead of hurdles.
Briefly in the news
Let's take a quick look at some of the other stories that shaped our week.
- If the mall feels a little emptier than usual, you're not alone in thinking you're alone. Mall staples such as Gap
(NYSE: GPS)and Abercrombie & Fitch (NYSE: ANF)posted double-digit declines in September comps. Gap's Old Navy was a total disaster, with North American stores suffering a 24% decline. Quick! Someone call mall security. I think specialty retail's fundamentals just got robbed.
- The Fed cut interest rates, part of an orchestrated global initiative to lower rates worldwide. Even China played along, which may be a surprise, since its economy is still expanding. A few Chinese growth-stock bellwethers like Baidu.com
(Nasdaq: BIDU)and Sohu (Nasdaq: SOHU)have actually seen their earnings estimates climb over the past three months.
(Nasdaq: DISH)was denied an appeal in its drawn out court battle with TiVo (Nasdaq: TIVO). The satellite television giant is now on the hook for $104 million after trampling on TiVo's patent-rich pedigree. Dish will continue to fight, but TiVo is proving that it's better to work with the PVR pioneer and license its technology than try to fight it
Until next week, I remain,
Gap is a Motley Fool Inside Value recommendation. Baidu.com is a Rule Breakers selection. Netflix and Gap are Stock Advisor recommendations. Try any of our Foolish newsletter services free for 30 days.
Longtime Fool contributor Rick Munarriz recommends windshield-wiper fluid when trying to look back. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. He does not own shares in any of the stocks in this story, save for TiVo. The Fool has a disclosure policy.