Netflix reported its third quarter results last night, which were actually above analyst estimates, but shares are tradign down over 35% in premarket trading as investors react to news of such a massive drop in the company’s subscribers, its first in years.

Earnings for the quarter were $1.16 per share, on revenues of $822 million. Analysts had been expecting to see the company report earnings of $0.96 per share, on revenues of $812.5 million.

Typically when a company reports such strong earnings and revenues its stock trades sharply higher, but investors feel as though the subscriber drop that Netflix saw during the quarter may not be over just yet. Netflix has historically been very good at understanding what its customers want, and that is the reason why it became the leader in DVD rental and streaming video, but a couple big blunders earlier this year have left its subscribers, and investors scratching their heads and wondering if Netflix has lost its ability to stay ahead of the curve when it comes to giving its subscribers what they want.

Netflix’s first big mistake was to raise its monthly fees. While this did result in a new record for revenues, the company paid for that with few subscribers, and in its highly competitive insdustry, subcriber numbers are the key to success. Following the decision to raise its rates, it made an even more dramatic blunder in its decision to split its streaming and DVD rental business. It later changed its mind and reversed the decision to split to the 2 businesses, but the impact the decision had on its customers was not so easy to reverse.

Has Netflix lost touch with its customers? It definitely did earlier this year, and while it has tried to correct its mistakes, you have to wonder if / when the next big mistake will come from the company’s management. Netflix still has a solid business model, but once a company loses its customers confidence, it is very hard to regain it, and we will just have to see if Netflix is able to get back on track, or if customers will continue to look for other ways to get their streaming media.

The stock is down 37%, or $44.00 in premarket trading to $74.77

Going into this morning’s earnings report, analysts had been expecting to see Apollo Group report earnings of $0.69 for its fiscal second quarter. Adjusted earnings were higher than estimates at $0.84 per share, but actual results showed a loss of $0.45 per share.

The primary reason why the company had such a big loss was due to a drop in new student enrollments.

Apollo is the parent company for Pheonix University, and it is working hard to attract new students to its program. In order to attract new students, the company has been allowing students to try out their programs for free before deciding if they want to join the program full time.

In addition to allowing students a trial period, Apollo is also investing heavily into marketing itself which is also weighing on the company’s bottom line. The amount that Apollo pays to put a new student into its program has doubled over the past year to $3,200 .

Looking ahead to its full year 2011 results, Apollo now expects to see net revenue in a range of $4.65 billion to $4.75 billion. Analysts have previous forecast full year revenues of $4.69 billion.

The stock is trading down 10.2% in premarket trading.

GameStop had a very respectable 10% jump in sales, spurred by strong demand for hit titles such as Activision (ATVI)’s Call of Duty Black Ops.

Going into this morning’s earnings report, analysts had been expecting to see GameStop post earnings of $1.55 per share, but actual earnings came in slightly higher at $1.56.

During the same period last year the company had earnings of $1.29.

The majority of the company’s revenues comes from sales of new games, and in this area it saw a sales increase of 2.1% during the quarter. Used game sales gained more ground, rising 3.7% in the quarter. The fastest growing area of GameStop’s business was its sale of hardware devices, which were up 5.9% in the quarter.

The stock is trading up 3.2% this morning to $21.77, up $0.66.

1. Gamestop (NYSE: GME): The video game retailer is due to report its third quarter numbers tomorrow morning before the opening bell. Analysts are expecting the company to show earnings of 30 cents per share. For the same period last year, the company had earnings of 34 cents per share. The stock is trading up 0.6% on the day.

2. Sears Holding (NASDAQ: SHLD): The retailer is going to be reporting its third quarter numbers tomorrow, and analysts are expecting to see a loss of $1.09. For the same period last year the company had a loss of 90 cents a share. The stock is trading down 1.2% on the day. The company will be reporting its numbers before the market opens.

3. Gap Inc. (NYSE: GPS): The clothing retailer is going to be reporting its third quarter results tomorrow, and Wall Street is looking to see the company show 44 cents per share. For the same period last year the Gap had earnings of 35 cents per share. The stock is trading down 0.8% in today’s market.

A big day for retailers, and will give us a better view of just how strong the current recovery actually is.

Investors continue to express concern that the stimulus package that was recently passed in the House is not going to get passed when the Senate gets its chance to vote on the new plan. There is still a good deal of concern over what the new package is going to do to address the ailing bank industry.

Consumer spending fell again in December, as the Commerce Department announces that personal spending in December fell by another 1%, as incomes dropped by 0.2% in the month as layoffs continue to mount. Analysts had been expecting to see consumer spending off by 0.9% in the month.

The Fed stated that economic growth had slowed “markedly in recent months,” and that the cut was necessary.

Futures are trading higher this morning, and it looks like we should break the five day losing streak on Wall Street, and get some much needed bounces in some pretty beaten up stocks today.

Look for another sell off on Wall Street, as futures are indicating a very sharp drop at the open. After the volatile week last week, many of us had some hopes that the Bush approved $700 billion bailout plan that was passed late on Friday would help spark a slight bounce, but that is not to be the case, and stocks are set for a much lower open to get the week started.

There is going to be a lot of pain out there today.

Futures are trading higher today, but it is going to take a lot more than one day of upside to make up what we lost yesterday.

Yesterday started off slowly as investors were skeptical that the proposed Bush bailout plan was going to be enough to save the troubled economy, but that fear turned to panic once the market realized that the plan was not going to go through all at yesterday afternoon.

Lawmakers are going to be on holiday until Thursday to observe the Jewish holidays, but there should still be some action taking place behind closed doors aimed at ironing out a new deal that will satisfy both Congress and Wall Street. We will see if / when that is able to take place.

The Bush administration is pushing hard for its $700 billion bailout, but Wall Street doesn’t believe that the Bush plan is going to be enough to help bailout the struggling economy, and futures are trading sharply lower this morning now that it appears that plan is going to pass Congress later this week.

Let’s take a look at the numbers; For the quarter, Exxon posted $2.22 per share on profits of $11.68 billion and a stunning $138 in revenue. If you want to look at it in a different way, that means that the company made profits of $1,485.55 every single second of the quarter.

Sounds great, but analysts were disappointed and were expecting to see the company come in much higher, with EPS of $2.47, and revenues of $144.4 billion.

As a result the stock is dropping today, as traders have looked past the record setting numbers, and driven shares of the company down by about 3.5% after an hours trading this morning.

The main culprit was, believe it or not, the high oil prices. For Exxon, since the company both produces it own oil, and refines it into gasoline, the record high prices that oil has reached lately have put a crimp in the company’s gasoline profit margins. Since Exxon actually buys more oil than it sells, the rising oil prices hit the company’s refining margins, since oil prices were about twice what they were during the same period last year, with gasoline prices “only” rising about 30%.

So, the boys over at Exxon can enjoy sitting back and enjoying the title of the biggest quarterly profit by a U.S. company once again, but if they want to keep a smile on their faces, they are going to have to continue to look for ways to overcome the profit margins in their refining business moving forward.