Despite the bitter competition with rival video rental service Blockbuster, Netflix (NSDQ: NFLX) doesn’t seem to have suffered much over the past year. The Los Gatos, CA-based company posted a 22.7 percent gain in Q3 GAAP net income, as profits came in at $15.7 million, or $0.23 per diluted share, compared to $12.8 million, or $0.18 per diluted share, for the same period last year. But from a sequential standpoint, Netflix earnings fell 38.7 percent, from Q207’s $25.6 million.

On the revenue front, Netflix brought in $294 million in Q3, a 15 percent year-over-year increase over last year’s $256 million. Meanwhile, Netflix saw a 3 percent sequential decline from Q207’s $303.7 million. Other highlights from the quarter included:

-- Subscriptions: By the end of Q3, Netflix had about 7.02 million total subscribers, a 24 percent year-over-year rise from 5.66 million total subs for the same period in 2006. Growth from Q207 was a modest 4 percent, as the company said it had 6.7 million subs. Subscriber acquisition costs for quarter were reduced. For Q3, acquisition costs were $37.91 per gross subscriber addition, compared to $45.32 for Q306 and Q207’s $44.02. 

-- Churn: Q3 churn was 4.2 percent, unchanged from last year. There was a slight drop when compared to Q207’s 4.6 percent, however.

-- Outlook: Netflix expects Q4 revenue to be between $297 million to $302 million. It expects to have between 7.3 million to 7.5 million subs by the end of that quarter, up from 6.8 million to 7.3 million. GAAP net income is projected to range from $6 million to $11 million, up from net income loss of $1 million to $4 million.

For the full year, Netflix anticipates revenue to hover around $1.2 billion, with GAAP net income to come in between $57.2 million to $62.2 million. More to come. Earnings release | Webcast (5:00 p.m. EDT)

-- Update: Netflix is looking into ways it can deliver movies straight to subscribers’ TVs via internet-connected HD DVD players and online game consoles, the company’s CEO Reed Hastings said during the earnings call this afternoon, Reuters reported. Last January, Netflix began offering movie downloads and is quickly trying to expand the service, which currently has about 1,000 videos available.

-- THR: The expanded web services could be up and running next year, Hastings said. He declined to offer more details, saying he would discuss Netflix’s plans more fully in January.