Streaming pushes Netflix to 52% profit gain
thurly.net
Company surpasses 20 million customers, breezes past estimates
By David B. Wilkerson, MarketWatch
CHICAGO (MarketWatch) — Shares of online DVD and streaming rental provider Netflix Inc. were up 9% in after-hours trading Wednesday on a better-than-expected first-quarter forecast and strong fourth-quarter results.
Netflix shares (NASDAQ:NFLX) were up $16.09 at $199.12 in evening trading.
The company’s fourth-quarter profit rose 52%, blowing past most analysts’ estimates, as its subscribers surpassed 20 million, and a stream-only plan gained momentum with consumers.
The company’s first-quarter forecast was also well ahead of Wall Street’s projections, as more than one-third of new customers are signing up for Netflix’s $7.99 per month stream-only plan, introduced in November.
The company said it earned $47 million, or 87 cents a share, compared with a profit of $31 million, or 56 cents a share, in the year-earlier period. Revenue rose 34% to $596 million.
Analysts polled by FactSet Research, on average, were expecting a profit of 71 cents a share on revenue of $596.4 million.
The company said it expects the percentage of new subscribers who sign up for the stream-only option to “grow over time.” Most other initial customers are opting for a plan that allows one disc at a time and unlimited streaming for $9.99 a month.
Netflix said it expects to end the first quarter with 21.9 million to 22.8 million U.S. subscribers, and revenue of $684 million to $704 million.
Net income is expected to be in the range of 90 cents to $1.13 a share.
For the first quarter, respondents to FactSet’s survey were expecting a profit of 87 cents a share on revenue of $675.7 million.
For a monthly fee starting at $7.99, Netflix users can stream a selection of about 20,000 movies and TV episodes over the Web to their computers or TVs. The company also offers more than 120,000 DVD and Blu-ray titles. |
