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Netflix’s earnings twice as nice

Tuesday, October 18, 2016 5:29
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(Before It's News)

Netflix Inc (NASDAQ:NFLX) shares were a ratings winner in pre-market trading after it delighted the market with its earnings last night.

The video streaming pioneer’s shares were up 19% in screen-based trading this morning after earnings per share came in at 12 cents, twice the level the market had been expecting.  

Third quarter revenues topped US$2bn for the first time, rising to US$2.29bn from US$2.10bn in the preceding quarter and US$1.74bn in the third quarter of last year.

In the US, streaming revenue rose to US$1.30bn from US$1.06bn a year earlier, and is forecast to climb to US$1.40bn in the final quarter of the year.

The international operations are still making a loss, but the top line is growing rapidly, with third quarter revenue clocking in at US$853mln, versus US$517mln the year before.

Net income for the group as a whole was US$52mln, compared to US$29mln in the corresponding quarter of 2015 and market expectations of US$22mln.

The company added 400,000 members in the US during the quarter, compared to its forecast of an additional 300,000, while outside of its home market it added 3.2mln members, comfortably ahead of its forecast of 2mln.

For the first nine months of the year the company has added 12mln members worldwide, matching the number of additions it achieved in the same period of 2015.

“In the international segment, we exceeded our internal projection for net adds as the acquisition impact of our originals was greater than anticipated across many of our markets,” the company said.

The English sub-titles on that statement would be something like: “more people signed up for our service outside of the US than we expected because of the appeal of our original content”.

Management said it expected to operate around the break-even level for the rest of 2016 before “generating material global profits in 2017 and beyond”.

Story by ProactiveInvestors

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