Netflix, Inc. is a subscription service streaming movies and television episodes over the Internet and sending digital versatile discs by mail to more than 12 million subscribers.
Netflix shares pop as Q4 profits surprise
Shares of Netflix (NASDAQ:NFLX) soared over 35 per cent Thursday, after the online provider of TV shows and movies reported fourth quarter results that came in well ahead of analyst expectations as it added more U.S. video-streaming subscribers.
The company’s shares were higher by 37.87 per cent as at about 11:45 a.m. EDT, trading at $142.36.
Netflix late Wednesday reported fourth quarter income of $8 million or 13 cents per share, down from $35 million or 64 cents per share a year earlier, but well above analysts’ forecasts of a loss of 12 cents per share, according to analysts surveyed by FactSet.
Revenue stood at $945 million, compared to $876 million a year earlier, and also above FactSet’s call for $934.7 million in revenue.
The company said it added 2.05 million new U.S. video-streaming subscribers, to end 2012 with 27.15 million domestic subscribers. It had earlier said it expected to add between 1.3 and 2 million domestic streaming subscribers in the quarter.
Internationally, the company added 1.81 video-streaming subscribers, to end 2012 with 27.15 million international customers.
In its domestic DVD segment, Netflix said subscriptions declined less than it had anticipated to 8.2 million, driven by “stronger than forecasted retention”.
Looking ahead, Netflix said it expects net income will be relatively flat sequentially, as improvements in both domestic and international streaming profits will be offset by a decline in DVD contribution profit and increases in global operating expenses.
The company expects net income of between breakeven and $14 million or $0 to 23 cents per share.
Analysts are calling for per share earnings of nine cents in the next quarter.
The company also said it expects to add 28.5 to 29.2 million domestic subscriptions in the next quarter.
According to a MarketWatch report, at least four analysts raised their ratings on Netflix in the wake of the company’s report.