Netflix Shares Soar After Earnings Beat
Netflix delivered earnings that topped expectations, added more online subscribers and introduced a service that will allow users to stream four movies at the same time.
Netflix shares shot up more than 25 percent after the report. What's the stock doing now? (Click here for the latest after-hours quote.)
The company added 2 million customers in the U.S. and 1 million internationally to its streaming service, bringing up to more than 36 million streaming users in total. Netflix said that a great reception of its first original series "House of Cards" in 2013 helped with new subscribers.
The company also introduced a four-stream plan for $11.99 in the U.S. that will allow users to stream four movies at the same time.
"We've seen improvements in our business over the last year in content, in our product, in optimizing the way we process payments, and in the general recovery of our brand," the company said in a letter to shareholders.
The company posted first-quarter earnings excluding items of 31 cents a share, up from a loss of 8 cents a share in the year-earlier period.
Revenue increased to $1.02 billion from $870 million a year ago.
The company eked out a profit of $2.7 million, or 5 cents per share, in the quarter. That contrasted with a loss of $4.6 million, or 8 cents per share, last year.
Analysts had expected Netflix to report earnings excluding items of 19 cents a share on $1.02 billion in revenue, according to a consensus estimate from Thomson Reuters.
For the second quarter, Netflix said it expects earnings to come in between 23 cents a share and 48 a cents a share. Analysts currently expect 30 cents a share.
"I think we need to look that they can grow more domestic streaming subs this year than they did last year," said Barton Crockett, analyst at Lazard Capital Markets, "They show that type of trajectory and you can start to believe Netflix can get more subscribers than HBO over time which I think would be a great argument for the stock."