Netflix Profit Rises, But Subscriber Additions Below View

(RTTNews) - Netflix Inc. (NFLX), Monday reported an increase in profit for the first quarter as revenues increased. However, the online-video streaming service's subscriber additions both domestically and internationally were below its estimates.

Netflix added 4.95 million subscribers globally in the quarter, falling short of its forecast of 5.20 million, to end the quarter with 98.75 million subscribers. The company added 1.42 million customers in the U.S., while international subscriber additions were 3.53 million, both below its expectations.

Looking forward to the second quarter, Netflix expects to add 3.20 million memberships, with 0.60 million in the U.S. and 2.60 million internationally.

"In Q1, we surpassed $2.5 billion in quarterly streaming revenue and added 5 million members. The opportunity provided to us by the growth of the global internet is gigantic and our plan is to keep investing as we increase membership, revenue and operating margins," the company said.

The video-streaming service provider is currently focusing on international expansion as it faces strong competition in the US. Currently, over 47% of its total members are now outside of the US.

However, Netflix's international expansion has come with higher expenses, as marketing costs increased to $271.3 million from $208.0 million, while technology and development expenses rose to $257.1 million from $203.5 million last year.

Los Gatos, California-based Netflix's first-quarter profit rose to $178.2 million or $0.40 per share from $27.7 million or $0.06 per share last year. On average, 34 analysts polled by Thomson Reuters expected earnings of $0.37 per share for the quarter.

Netflix's revenues for the quarter rose to $2.64 billion from $1.96 billion last year. Analysts had a consensus revenue estimate of $2.64 billion for the quarter.

For the first quarter, Netflix expects earnings of $0.15 per share, below $0.24 per share expected by analysts.

Meanwhile, commenting on Amazon's recent purchase of streaming rights for Thursday football, Netflix said, "Investors ask us about Amazon's move into NFL football. That is not a strategy that we think is smart for us since we believe we can earn more viewing and satisfaction from spending that money on movies and TV shows."

NFLX closed Monday's trading at $147.25, up $4.33 or 3.03%, on the Nasdaq. The stock, however, slipped $0.64 or 0.42% in the after-hours trade.