Netflix Profit Soars On Subscriber Growth; Stock Up 17%

(RTTNews) - Online video service provider Netflix Inc. (NFLX), Wednesday reported a more than five-fold jump in fourth-quarter profit, on domestic subscriber growth fueled by service improvements and sales of Internet connected devices, with results topped Wall Street estimates.

The popular movie streaming site also provided strong outlook for the first quarter. Netflix shares gained the most in a year - rallying 17 percent to $393 in after-hours trade on the Nasdaq.

Netflix added 2.33 million domestic subscribers to end the quarter with 33.4 million domestic paid members, up from 25.5 million domestic paid members a year ago.

Netflix has been investing in movie rights and new original shows to improve its subscriber base, and has attracted international paid members, which climbed to 9.7 million from 4.9 million in the same quarter last year.

The Los Gatos, California-based company posted fourth-quarter revenue of $1.18 billion, compared with $945 million last year. On average, 33 analysts polled by Thomson Reuters estimated revenues of $1.17 billion for the quarter.

The company expanded original content offerings in the quarter, launching a second season of Lilyhammer starring Steven Van Zandt, the first five episodes of first original animated series for 4 kids, Turbo F.A.S.T., from DreamWorks Animation, and original standup comedy specials.

Net income for the fourth quarter was $48.4 million or $0.79 per share, compared with $8 million or $0.13 per share a year ago. Thirty-three analysts had a consensus earnings estimate of $0.66 per share for the quarter. Analysts' estimates typically exclude special items.'

For the first quarter, Netflix expects net income of $48 million or $0.78 per share, domestic streaming revenue of $796 million and international streaming revenue of $267 million.

Analysts currently expect earnings of $0.77 per share for the first quarter.

The company expects to add 2.25 million domestic streaming members in the first quarter.

Earlier this month, a U.S. appeals court overturned the Federal Communications Commission's so-called net neutrality rules, raising the probability of Netflix facing costs from cable-TV and telephone providers.

Netflix stock closed Wednesday at $333.73, up $5.02 or 1.53%, on a volume of 6 million shares. In after hours, the stock gained $59.27 or 17.76, to trade at $393.00. In the past year, the share has traded in the range of $97.02 - $389.16.