Netflix earnings: 7 cents per share, vs expected EPS of 2 cents

Netflix on Tuesday reported quarterly earnings that topped analysts' expectations as its international expansion boosted subscriber growth.

The video streaming company posted fourth-quarter adjusted earnings of 7 cents per share, down from 10 cents a share a year earlier. Revenue came in at $1.82 billion, compared with $1.49 billion.

Analysts expected Netflix to post earnings of 2 cents per share on $1.83 billion in revenue, according to a consensus estimate from Thomson Reuters. The company's shares jumped as much as 10 percent in after-hours trading before giving up some of those gains.

Netflix CEO Reed Hastings delivers a keynote address at CES 2016 at The Venetian Las Vegas on January 6, 2016 in Las Vegas, Nevada.
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Netflix CEO Reed Hastings delivers a keynote address at CES 2016 at The Venetian Las Vegas on January 6, 2016 in Las Vegas, Nevada.

Netflix added 5.59 million total net subscribers in the quarter, up from 4.33 million additions in the previous year. The company had 4.04 million net subscriber additions outside of the United States, easily beating expectations for 3.51 million and up from 2.43 million in the prior-year period.

"In terms of the outperformance, it was pretty broad-based," said Netflix CEO Reed Hastings in a video call after the results.

Earlier this month, Netflix said it had expanded service to more than 190 countries. The international push comes amid increased spending on a range of original programming, which contributed to a decrease in fourth-quarter net income from the previous year.

Ted Sarandos, head of content acquisition at Netflix, acknowledged in the video call that original programming spending as a percentage of costs grew in the quarter.

Fourth-quarter domestic net subscriber growth of 1.56 million came in slightly below estimates. Netflix said the transition to chip-based credit and debit cards, which it highlighted as a problem last year, "continues to be a background issue."

"I'm not worried about the U.S. because it's totally saturated. Everybody in the U.S. has Netflix already or steals it from somebody else. So this international growth is where it's at, and they are just killing it already," said Ross Gerber, CEO of Gerber Kawasaki, on CNBC's "Closing Bell."

The company said its average subscriber price grew 4 to 5 percent in the quarter from the previous year.

For the current quarter, Netflix projects 6.1 million total net additions versus a Wall Street estimate for 4.94 million. Guidance for 4.35 million new international members easily topped estimates.

Projections for 1.75 million net U.S. additions came in below Wall Street's expectations.

The streaming video company's stock has been among the most popular in the last year, rising 124 percent. But it has not avoided a broad sell-off so far in 2016, falling more than 5 percent.

Analysts monitor the company's original programming, which contributes to its ability to draw new members. This week, Netflix released 2016 premiere dates for hits "Orange is the New Black," "House of Cards" and "Unbreakable Kimmy Schmidt," among other series.

Netflix also said it still had 4.9 million subscribers to its DVD service.

CNBC's Julia Boorstin contributred to this article.