Netflix Profit, Subscriber Growth Up - Update

(RTTNews) - Online-video streaming service Netflix Inc. (NFLX), Monday reported a third-quarter profit that surged from last year as revenues grew driven largely by strong subscriber additions.

Netflix added 5.30 million subscribers globally in the quarter, easily beating its forecast of 4.40 million, to end the quarter with 109.25 million subscribers. The company added 0.85 million customers in the U.S. during the quarter, above its estimates. International subscriber additions were 4.45 million, far above its expectation of 3.65 million.

The company was able to increase its subscriber count thanks to demand for its original web series including Narcos, Orange is the new Black and Stranger Things as well as "strong adoption of internet entertainment across the world."

Looking forward to the fourth quarter, Netflix expects to add 6.30 million memberships, with 1.25 million in the U.S. and 5.05 million internationally.

Los Gatos, California-based Netflix's third-quarter profit surged to $129.6 million or $0.29 per share from $51.5 million or $0.12 per share last year. On average, 36 analysts polled by Thomson Reuters expected earnings of $0.32 per share for the quarter.

Netflix's revenues for the quarter rose to $2.98 billion from $2.29 billion last year. Analysts had a consensus revenue estimate of $2.97 billion for the quarter.

The video-streaming service provider said global streaming revenues rose 33 percent, driven largely by 24 percent increase in average paid membership and 7 percent growth in average selling price.

Meanwhile, Netflix's international expansion has come with higher expenses, as marketing costs increased to $312.5 million from $282.0 million, while technology and development expenses rose to $255.2 million from $216.1 million last year.

For the fourth quarter, Netflix expects earnings of $0.41 per share, far above $0.33 per share expected by analysts.

Recently, Netflix announced its plans to increase price rates of its HD and 4K video plans. The subscription price for the "standard" tier will increase from $9.99 to $10.99, while "premium" tier subscription rate will increase from $11.99 to $13.99. However, pricing for the "basic" $7.99 tier will see no price changes.

NFLX closed Monday's trading at $202.68, up $3.19 or 1.60% on the Nasdaq. The stock further gained $4.06 or 2.00% in the after-hours trading.