160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! SAN FRANCISCO – Netflix Inc. on Wednesday posted the highest first-quarter profit in its eight-year history, but the online DVD rental pioneer’s performance flopped on Wall Street. Investors turned their thumbs down largely because Netflix had trouble attracting and retaining subscribers amid stiffer competition from Blockbuster Inc. during the first three months of the year. To make matters worse, Netflix management warned its service may continue to be upstaged by Blockbuster through the remainder of the year. As a result, Netflix expects to finish 2007 with 600,000 to 700,000 fewer customers than the Los Gatos-based company had projected when the year began. Those dreary developments overshadowed Netflix’s first-quarter profit of $9.9 million, or 14 cents per share, during the first three months of the year. That more than doubled from net income of $4.4 million, or 7 cents per share, at the same time last year. Revenue rose 36 percent from last year to $305.3 million. The earnings fell 2 cents below the average estimate among analysts surveyed by Thomson Financial, one of the reasons that Netflix Chief Financial Officer Barry McCarthy described the showing as the most disappointing quarter since the company went public in May 2002. McCarthy expressed his dismay during a Wednesday conference call. The letdown punished Netflix’s stock, which plunged $2.26, or 9.4 percent, to close Wednesday at $21.70 on the Nasdaq Stock Market. Netflix tried to bolster its shares by announcing plans to buy back $100 million worth of stock through the rest of the year. This is hardly the first time that investors have gotten queasy about Netflix’s prospects. Similar doubts arose in 2003 when Wal-Mart Stores Inc. entered the online DVD industry, a threat that evaporated last year when the world’s largest retailer handed off its subscribers to Netflix.