Netflix Delivers Surprise Profit, Outlook; Shares Jump

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Netflix surprised the market Wednesday with unexpected profit and an outlook that topped forecasts.

The streaming video provider's shares jumped more than 30 percent after the closing bell, following the news.

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"Reed Hastings has delivered. He's driving Netflix right now as well as anybody could manage a very difficult business," Porter Bibb of Mediatech Capital Partners told CNBC's "Closing Bell."

Net income fell 78 percent to $8 million from a year ago.

Excluding items, the company posted an unexpected profit of 13 cents a share, though that was down from 73 cents a share in the year-earlier period.

Netflix's Internet video service added 2.1 million U.S. subscribers, for a total of 27.2 million, during the final three months of the year to produce the surprise profit. It also ended the quarter with an additional 1.8 million subscribers outside the U.S.

Revenue increased 8 percent to $945 million from $876 million.

Wall Street had expected Netflix to report a loss excluding items of 13 cents a share on $934 million in revenue, according to Thomson Reuters consensus estimates.

For the first quarter, Netflix expects earnings to be between break-even to 23 cents a share on revenue of $1 billion to $1.03 billion. Analysts currently expect a loss of 7 cents a share on revenue of $969 million.

Before the earnings announcement, Netflix stock was already up more than 25 percent since the news in December of a deal for exclusive first-run rights of Disney movies starting in 2016. A deal for television content from Time Warner was struck Jan. 14.

"The likelihood of a continued rise [in the stock] despite all of the good things Reed Hastings is doing is probably driven by a short squeeze. As of the end of last year, a quarter of the outstanding shares were short. Those short sellers are caught in a real bind. I expect the stock will continue to go up as they bail out," Bibb said.

On Feb. 1, Netflix will debut the series "House of Cards," produced exclusively for the video streaming service and starring Academy Award-winning actor Kevin Spacey.