Netflix Posts Surprise Profit In Fiscal Q4, Shares Leap Almost 34% in Afterhours (NFLX)
Shares of Netflix Inc. (NASDAQ: NFLX) skyrocketed in aftermarket trade on Wednesday after the movie-streaming company surprised the Wall Street by reporting a profit in the fiscal fourth quarter even as it added more-than-expected subscribers in the same period.
Since the Company expanded its traction aggressively in international markets lately and paid hefty amounts of money to acquire the rights for more quality content videos, Wall Street analysts’ outlook on Netflix’s fiscal fourth quarter was downbeat, expecting a loss of 13 cents a share.
However, the brisk pace at which company expanded last year will stall in the first quarter of 2013, said the Los Gatos, California based Company.
Netflix proved the Wall Street’s analysts wrong as it handed a profit of $ 8 million or 13 cents a share, compared to earnings of $35 million or 64 cents, in the year-earlier quarter.
Addressing analysts and investors, Netflix’s Chief Executive, said trough a letter, “Our holiday season was particularly strong, driven by consumers buying new electronic devices, including tablets and smart TVs.”
Revenue for the fiscal fourth quarter stood at $945 million, up from $876 million, in the same period of last year. Analysts’ consensus estimate was for revenue of $934 million.
At the end of quarter four, Netflix’s streaming subscribers’ base in the U.S. market rose by 2.05 million to 27.15 million while in international market the base expanded by 1.81 million to 6.12 million.
Nonetheless, the Company missed its own target set in early 2012 which was of adding 7 million U.S. streaming subscriptions by the year-end. For 2012, the Company added 5.48 million, $8/month streaming accounts.
During 2012, Netflix expanded both in Latin America and Europe, including all Nordic countries. The Company reported loss of $105 million from its international operations; however, it was still below analysts’ expectation of loss of $107 million to $109 million.