(By Salman - iStockAnalyst Writer)Netflix Inc (NASDAQ: NFLX) is scheduled to report third-quarter financial results after the market close on Thursday, October 22, 2009. Analysts, on average, currently expect the company to report earnings of 46 cents a share on revenue of $419.85 million. In the year ago quarter, the company reported earnings of 33 cents per share on revenue of $341.3 million.

Netflix, Inc. is the world's largest video rental subscription service. The company offers its subscribers access to a library of movie, television, and other filmed entertainment titles on digital versatile disc (DVD). As of December 31, 2008, Netflix served approximately 10 million subscribers with approximately 100,000 DVD and Blu-ray titles, and a library of 12,000 choices.

The company has benefited from the economic downtrend as cash strapped consumers stayed at home for less-pricey entertainment. At a time when most other companies struggled to rake in profits, Netflix registered strong performance and continued to increase its profits and subscriber base. The Los Gatos, California-based company posted a second-quarter net income of $32.4 million or $0.54 per share, compared to $26.6 million or $0.42 per share, in the comparable quarter a year ago. Quarterly revenue jumped 21% to $408.5 million from $337.6 million last year. Analysts, on average, expected the company to report earnings of 50 cents per share on revenue of $409.72 million for the quarter. The company's gross margin improved to 34.1% in the second quarter from 31.8% in the previous fiscal year.

Netflix's total subscribers surged 26% to about 10.60 million at the end of the second quarter from 8.41 million at the end of the last year's second quarter. Net subscriber change in the quarter was an increase of 289 thousand compared to an increase of 168 thousand in the second quarter of previous year. Paid subscribers represented 98% of total subscribers at the end of the quarter. Gross subscriber additions for the quarter totaled 1.94 million, representing a 40% year-over-year growth. Subscriber acquisition cost for the second quarter was $23.88 per gross subscriber addition compared to $28.89 for the same period a year earlier. Churn, which includes free subscribers and paying subscribers who elect not to renew their subscription, for the quarter was 4.5% compared to 4.2% for the second quarter of previous year.

The company expects the momentum to continue in second half as well. For the third quarter, the company expects GAAP earnings in the range of $23 million to $28 million or 39 cents to 47 cents per share. Revenue for the third quarter is expected to be between $416 million and $422 million, with subscribers in the range of 10.9 million to 11.1 million by the end of the quarter.

For the fourth quarter, the company expects to report earnings of $21 million to $26 million or 36 cents to 44 cents per share and revenue in the range of $431 million to $445 million, with subscriber base projected to increase to a range of 11.6 million to 12 million by the end of the quarter.

In July, the company boosted its full-year GAAP earnings expectation to a range of $99 million to $109 million or $1.65 to $1.82 per share from previous range of $96 million to $106 million or $1.56 to $1.72 per share. Revenue is forecast to be between $1.65 billion to $1.67 billion, up from previous guidance range of $1.63 billion to $1.67 billion.

Early in August, Netflix Inc. announced a $300 million stock buyback through the end of 2010.

In terms of stock performance, Netflix shares are up almost 60% since the beginning of the year. On Thursday, shares of the company fell 15 cents or 0.33% to $47.69.

Disclosure: Author doesn't own any of the stocks discussed here.