Friday, 22 February, 2019

Netflix soars as blistering subscriber growth restores faith

Netflix soars as blistering subscriber growth restores faith Netflix soars as blistering subscriber growth restores faith
Stacy Diaz | 17 October, 2018, 21:31

But as long as Netflix is drawing lots of new subscribers, then investors are happy-so happy, in fact, they were buying up Netflix shares for around $388 apiece in after-hours trading, 12 percent above Tuesday's official closing level.

On top of that, Netflix is experiencing major growth in emerging markets like India and Brazil. Since Netflix doesn't release viewing data for its titles, it's not possible to know how successful the show has been, although Netflix said the show was a "hit".

In the U.S., where Netflix can now claim nearly half of households as users, the company expects to add 1.8 million new customers this quarter, bringing the domestic total to 60.3 million. In a letter to shareholders, CEO Reed Hastings and other executives attributed its third-quarter success in part to a strong content slate that included new seasons of Orange Is the New Black, Ozark, and Marvel's Luke Cage.

Netflix's results sent shares of Alphabet Inc, Facebook Inc and Inc up about 1 percent higher in extended trade.

That helped lift profit more than threefold to 89 cents a share, beating the 68-cent average of analysts' estimates.

Total revenue rose to $4 billion, in line with analysts' expectations, from $2.98 billion a year earlier.

In July, when Netflix last reported its quarterly earnings, the company's share price collapsed as subscriber growth appeared to slow.

For the current quarter, Netflix forecast it will add 1.8 million customers in the United States and 7.6 million in global markets.

Netflix's net income rose to $402.8 million, or 89 cents per share, in the third quarter ended September 30, up from $129.6 million, or 29 cents per share, a year earlier. Netflix has tripled in value over the past three years by posting record subscriber growth that consistently exceeds Wall Street forecasts.

"More than 80 million accounts have watched one or more of the Summer of Love films globally and we are already in production for the next set of original rom-coms for our members", Hastings wrote.

Media companies that once sold programs to Netflix for hundreds of millions of dollars are now building their own on-demand services to compete head on. Wall Street analysts had expected Netflix to add about 5.2 million streaming customers in the quarter. Disney and AT&T, the parent of Warner Bros. and HBO, are each looking to introduce new services next year - after completing takeovers of other companies worth a combined $160 billion. "We're just going to focus on that for a very long time".