At first glance, it looks like the company beat them. Netflix (NFLX) posted earnings of 37 cents a share on revenue of $394.1 million. Wall Street had been looking for 31 cents and $390 million, respectively. The company said it ended the quarter with 10.3 million subscribers, which is the high end of the range it had promised to deliver.

And guidance was strong, too. From the company’s press release, here are Q2 predictions:

– Ending subscribers of 10.4 million to 10.6 million
– Revenue of $403 million to $409 million
– GAAP net income of $27 million to $32 million
– GAAP EPS of 44 cents to 53 cents per diluted share

And here’s the company’s revised guidance for 2009 (full year), which it increased:

– Ending subscribers of 11.2 million to 11.8 million, up from 10.6 million to 11.3 million
– Revenue of $1.63 billion to $1.67 billion, up from $1.58 billion to $1.635 billion
– GAAP net income of $96 million to $106 million, up from $88 million to $98 million
– GAAP EPS of $1.56 to $1.72 per diluted share, up from $1.43 to $1.59 per diluted share.

All of this seems to compare favorably with Wall Street’s expectations. Via Citibank’s Mark Mahaney, here’s what investors were looking for (click to enlarge):

Netflix shares have been bouncing around in the aftermarket following the earnings release, and last I looked, they’re just about flat. It will probably take investors a while to figure out if they’re disappointed that the numbers aren’t even bigger.

UPDATE: The stock is now down around 5%, presumably because guidance wasn’t strong enough. I’m back for the earnings call, which I’ll live blog part of: I’m particularly interested in Netflix’s digital strategy, so I’ll be focusing on that.

CEO Reed Hastings: Subscribers renting more DVDs and Blu-rays than ever. Disc rental will continue to grow for many years, so we’re investing in that.

More realistic Blu-ray pricing (previously discussed) of 20% to 25% premium for subs. Though we’re paying the studios a higher premium for Blu-ray. If we can get those costs in line, we can promote Blu-ray more agresssively [i.e. bring down your prices, Hollywood, and we'll push more of your high-margin discs].

We are losing customer to $1 kiosk rentals. “By end of they year, kiosks will likely be our #1 competitor,” as rental stores fail. “Longterm effects,” of cheap kiosks “are not positive for us, or the industry as a whole.”

Streaming: Overall consumer embrace of online video growing. “Not hard to believe that online video will grow substantially every year for a long time”. [Duh]. Important for us to be spending “aggressively” on streaming content. “But that means we are essentially buying many titles twice now”. Buying once on DVD, and again on streaming. Great for content owners, ok for us since costs for streaming are lower than physical distribution.

We believe we’ll get more streaming licenses as TV networks, who control titles, look to increase distribution. We are looking to a day, when we have plentiful content for streaming… “we will simply be a fourth option for consumers and a fourth revenue source for networks and studios”. It’s possible that within a few years, all CE devices sold will include a Netflix component.

It’s easy to focus on the Internet for its distribution abilities, but its important to think about social possibilities. Future of Internet TV is closer to Facebook and social networks than the standard grid lineup. Social, social, social. Long term outlook for Internet TV is very promising.

[Join to pass on most of CFO notes] No “cocooning” effect from recession apparent in DVD usage. Acquisition costs “record low” in part because of depressed online ad pricing.

Q&A: “Tremendous amounts” of hardware partnerships in the pipeline. Xbox renewal? No answer.

Have sub growth slowed at end of quarter? No. Q4 growth back-end loaded because of holidays, and Q1 growth front-end loaded for same reason.

How about a fee-based service for a streaming only service by year’s end? We talk about that from time to time, but not pressing. For now, combination of DVD rental and streaming is what consumers are interested in. A streaming-only service would be a “sweetner” to what we have now. We don’t think it would cannibalize, though.

Can you talk about streaming-enabled devices’ contribution to subscriber additions? No details, but we think it’s helpful to have Xbox, Blu-ray players, etc. “It’s definitely a very positive part of the ecosystem for us”.

What are dynamics to adding more content to streaming library? More money.

Can you talk more about new marketing efficiencies? There aren’t any new ones, really. Weak economy, lower ad prices, plus consumer excitement about streaming product.

What does competition look like on streaming front from Apple and Amazon? Right now, “all three of us are three drops of water in the pool that is watching television”, … “we all recognize in the long-term there will be competition between us” but we’re all “so tiny” compared to TV-viewing that that’s what we’re focused on.

That appears to be it for streaming-related queries. I’ll check back in with the full transcript later on.

A few quick highlights from the earnings statement and investor call before the official release, appended below.

• Apple sold 22.7 million iPods and 4.4 million iPhones during the quarter.
• It shipped 2.5 million Macs.
• Looking ahead to the second fiscal quarter of 2009, the company expects revenue in the range of about $7.6 billion to $8 billion.
• The release includes no mention of Jobs’s health.

During a call to discuss Apple’s latest earnings, Steve Jobs and his health were top of mind. Indeed, the first question of the call centered around this very issue:

Q: Well, since I’m going first, I guess I’ll ask how is Steve and hope he’s doing well. And I just wanted to know how, if you’ll run the company differently with Tim or the same and if need be, if Tim — do you feel like you would be the likely candidate if the worst case scenario were to happen if Steve was unable to return.”

Apple COO Tim Cook: There is an extraordinary depth and breadth in Apple’s executive team. And it leads over 35,000 wicked smart people. We believe we’re on the face of earth to make great products, and that’s not changing. We believe in simple not complex. We believe in deep collaboration. We have the self-honesty to admit when we’re wrong. These values are so embedded in the company that we will do extremely well regardless of who has the CEO Job. I strongly believe that Apple is doing the best work in its history.

Also the focus of some discussion the possibility of an Apple netbook. Is Apple considering entering the sub-$500 netbook market? Cook says not right now. “We’re watching that space, but from our point of view, the products are based on hardware that’s not very powerful, software that’s not that good and cramped displays. We don’t think that people are going to be pleased with that. It’s a category we watch and we have some ideas for it, but we think the products there right now are inferior.”

Here’s the official release:

Apple Reports First Quarter Results
Best Quarterly Revenue and Earnings in Apple History
iPod Sales Set New Record

“Even in these economically challenging times, we are incredibly pleased to report our best quarterly revenue and earnings in Apple history—surpassing $10 billion in quarterly revenue for the first time ever,” said Steve Jobs, Apple’s CEO.

A few quick highlights from the earnings statement and investor call before the official release, appended below.

• Apple sold 22.7 million iPods and 4.4 million iPhones during the quarter.
• It shipped 2.5 million Macs.
• Looking ahead to the second fiscal quarter of 2009, the company expects revenue in the range of about $7.6 billion to $8 billion.
• The release includes no mention of Jobs’s health.

During a call to discuss Apple’s latest earnings, Steve Jobs and his health were top of mind. Indeed, the first question of the call centered around this very issue:

Q: Well, since I’m going first, I guess I’ll ask how is Steve and hope he’s doing well. And I just wanted to know how, if you’ll run the company differently with Tim or the same and if need be, if Tim — do you feel like you would be the likely candidate if the worst case scenario were to happen if Steve was unable to return.”

Apple COO Tim Cook: There is an extraordinary depth and breadth in Apple’s executive team. And it leads over 35,000 wicked smart people. We believe we’re on the face of earth to make great products, and that’s not changing. We believe in simple not complex. We believe in deep collaboration. We have the self-honesty to admit when we’re wrong. These values are so embedded in the company that we will do extremely well regardless of who has the CEO Job. I strongly believe that Apple is doing the best work in its history.

Also the focus of some discussion the possibility of an Apple netbook. Is Apple considering entering the sub-$500 netbook market? Cook says not right now. “We’re watching that space, but from our point of view, the products are based on hardware that’s not very powerful, software that’s not that good and cramped displays. We don’t think that people are going to be pleased with that. It’s a category we watch and we have some ideas for it, but we think the products there right now are inferior.”

Here’s the official release:

Apple Reports First Quarter Results
Best Quarterly Revenue and Earnings in Apple History
iPod Sales Set New Record

“Even in these economically challenging times, we are incredibly pleased to report our best quarterly revenue and earnings in Apple history—surpassing $10 billion in quarterly revenue for the first time ever,” said Steve Jobs, Apple’s CEO.