Netflix stock price jumps after hours on 7 million new subscribers

20 Octubre, 2018, 15:41 | Author: Arnold Perez
  • Netflix shares soar as it announces 6.96m new members

In an effort to provide more consistently accurate subscriber numbers moving forward, Netflix will stop reporting total memberships and focus instead on paid memberships in Q4, eliminating the fluctuations caused by members who abandon the service at the end of the one-month free trial period.

The company on Tuesday reported that far more people signed up for its video-streaming service in the third quarter than expected. They remain well below the record high of $423.21 reached in June.

The streaming behemoth said Tuesday that its subscriber base grew by almost 7 million in the quarter, led by the addition of 5.9 million new users overseas. "Eventually your market may not be able to hold your growth ambitions".

During the quarter, the company added 6.96 million net subscribers-1.09 million new subscribers in the USA and 5.87 million internationally. But did you know that this exact sentiment may soon apply to Friends' time on Netflix, even thought it was only added to the streaming service at the beginning of this year? The company had revenue of $4 billion for the quarter, compared to analyst estimates of $3.99 billion. The additions bring Netflix's total global subscriber count to 137 million. Netflix parents are happy to pay for that kind of babysitting so long as the content is there.

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Netflix had expected to add about five million members in the quarter.

The streaming giant also announced fourth-quarter subscriber growth that blew past expectations.

The company's stock closed up 4% for the day, to $346.40 per share. With plans to pour more billions of dollars into original contents, Netflix established a target for itself - it plans to add a total of 28.9 million customers this year. Growth is still being driven internationally, as the company now has nearly over 80 million subscribers outside of the US. Equities research analysts forecast that Netflix will post 2.67 EPS for the current year. Worldwide markets accounted for 84 per cent of new customers, the company said, and constituted 57 per cent of its overall customer base. In that context, Netflix's partnerships with Airtel, Hathway Broadband, Tata Sky etc can perhaps be viewed as guideposts on how it aims to drive growth beyond the already well-acquainted target base in India. That's an increase of 15% and 13% compared to Q4 past year. The Internet television network reported $0.89 earnings per share for the quarter, topping the consensus estimate of $0.68 by $0.21.

Analysts from US financial group Keybanc downgraded their rating on Netflix to "sector weight" from "overweight", questioning whether the company was capable of improving investment returns and margins in years to come.

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