Netflix Earnings, Subscriber Growth Tops Wall Street; Shares Up 12%

(RTTNews) - Online-video streaming service Netflix Inc. (NFLX), Tuesday reported a third-quarter profit that surged from last year as revenues increased 34% driven largely by strong subscriber additions. Shares surged nearly 12 percent in the after-hours trading.

Netflix added 6.96 million subscribers globally in the quarter, easily beating its forecast of 5.00 million, to end the quarter with 137.10 million subscribers. The company added 1.09 million customers in the U.S. during the quarter, above its estimates of 0.65 million. International subscriber additions were 5.87 million, far above its expectation of 4.35 million.

Looking forward to the fourth quarter, Netflix expects to add 9.40 million memberships, with 1.80 million in the U.S. and 7.60 million internationally.

Los Gatos, California-based Netflix's third-quarter profit surged to $403 million or $0.89 per share from $130.0 million or $0.29 per share last year. On average, 39 analysts polled by Thomson Reuters expected earnings of $0.68 per share for the quarter.

Netflix's revenues for the quarter rose to 34% $4.00 billion from $2.99 billion last year. Analysts had a consensus revenue estimate of $4.00 billion for the quarter.

The video-streaming service provider said revenue growth was achieved largely due to a 25 percent increase in average paid streaming memberships and a 8 percent rise in average selling price.

Looking forward to the fourth quarter, Netflix expects revenues of $4.20 billion and earnings of $0.23 per share. Analysts polled by Thomson Reuters currently expect earnings of $0.51 per share and revenues of $4.23 billion.

NFLX closed Tuesday's trading at $346.40, up $13.27 or 3.98%, on the Nasdaq. The stock further gained $39.20 or 11.32% in the after-hours trade.