Netflix reports blowout 3Q results as shares soar

Streaming giant Netflix Inc (NASDAQ:NFLX) reported standout third quarter results on Tuesday as the number of subscribers beat expectations, causing shares to rally in afterhours trade.

The company announced that earnings per share hit US$0.89 on net income of $403 million, well above market consensus of an increase of US$0.68 and last year’s net income of $129.6 million and EPS of US$0.29. Revenue was at $4 billion, which matched expectations.

The company announced it added a net 6.4 million subscribers in the quarter, beating Netflix’s own forecast of 5.0 million. In the fourth quarter, the company forecast an additional 9.4 million new subscribers. 

Shares popped in after-hours trade, rising more than 13% to $391.54, having already closed on Tuesday up 3.98% to $346.40.

READ: Netflix draws mixed reaction on Wall Street after disappointing second-quarter results

Several banks and brokerages had reduced their price targets for Netflix, although most had pegged it as staying above $400. 

The list of those who downgraded the stock include Goldman Sachs, Raymond James and on Tuesday, Morgan Stanley.

Netflix remains a juggernaut in online streaming, with one study saying it accounts for 15% of all internet traffic globally.

Reporting by Rene Pastor, contactable on [email protected]

Story by ProactiveInvestors