Stock Market Champs..........10-24-06

Netflix, Inc. (NFLX)

Last Trade:	27.37
Trade Time:	4:00PM ET
Change:	4.29 (18.59%)

Netflix delivered a third quarter well above Wall Street's expectations on Monday.

Shares of the Los Gatos, Calif.-based company surged in Tuesday morning trading, jumping 16%, or $3.75, to $26.83.

Netflix reported net income of $12.8 million, or 18 cents per diluted share, on revenues of $256 million. That was well above consensus forecasts, as Wall Street had been predicting earnings per share of 12 cents.

Subscriber growth was also strong, as the company acquired 1,310,000 gross subscriber additions, a 42% increase year-over-year and a 22% jump from the previous quarter. Better still for the company, turnover was also down from the like quarter last year to 4.2% from 4.3%.

Netflix raised its revenue guidance for the fourth quarter to between $273 million and $278 million from a previous range of $267 million and $272 million. It also upped its net income expectations to between $7.5 million to $13.5 million, from a previous range of $3.8 million to $8.8 million.

Implicit in this guidance is the company's plan to spend $40 million on a digital download service the details of which will be revealed in January. Last year the company invested $10 million in this service. Unlike Amazon and Apple , Netflix's downloadable business will focus on movie rentals, not movie sales.

"[That] dovetails, well, we believe, with its DVD by mail, ordered online, core service offering," said Barton Crockett, an analyst for JP Morgan, in a research report.

Travelzoo Inc. (TZOO)

Last Trade:	38.62
Trade Time:	4:00PM ET
Change:	6.22 (19.20%)

Web travel-search company Travelzoo Inc. said Tuesday its third-quarter profit almost doubled on continued growth in online advertising.

The profit results beat Wall Street's estimates, but sales growth fell short of analysts' projections. Shares surged $6.60, or 20 percent, to $39 in morning trading on the Nasdaq, where they've traded between $16.50 and $52.99 over the past year.

Net income grew to $4.6 million, or 28 cents per share, from $2.3 million, or 13 cents per share, in the prior-year period. The results topped Wall Street's expectations of 24 cents per share, according to an analyst poll by Thomson Financial.

Revenue rose to $17.6 million in the quarter, up from $13.4 million in the year-ago period. Analysts, on average, had expected $18.2 million.

Travelzoo reported quarterly revenue growth at both its North American and European units. Also aiding the bottom line, Travelzoo said its effective income tax rate for the quarter was 46 percent, down from 48 percent in the year-ago period.