Netflix shares surge on positive subscriber news

Netflix shares surge on positive subscriber news”

Netflix is not looking to diversify to other areas for now, and is unlikely to feel compelled to for years to come, Reed told the post-earnings interview.

Analysts estimate that it added about 676 hours of original programming in the USA in the most recent quarter, 135% more than in the same period a year earlier. Netflix added 1.09 million subscribers in the US, and 5.87 million internationally, bringing the total number of subscribers to 137 million. The company, founded in 1997 as a DVD-by-mail service, posted its strongest years of subscriber growth in 2016 and again in 2017 - in its 20th and 21st years of operation.

Netflix's net income rose to $402.8 million, or 89 cents per share, in the third quarter ended September 30, up from $129.6 million, or 29 cents per share, a year earlier.

The world's largest paid online TV network added far more subscribers than analysts forecast in the third quarter and issued an upbeat outlook for the current three months, rebounding from a slowdown earlier this year. Earnings jumped to 89 cents per share, well above a projected 68 cents.

That news broke a streak of five straight quarters in which subscriber growth exceeded expectations.

"It was a surprisingly good quarter that caught a lot of the financial community off guard", said Jim Nail, a senior analyst at Forrester Research. Netflix said its bottom line would be weighed down by having to recognize on its income statement the money it's invested in licensing and developing movies and shows, particularly its "Originals".

Netflix added almost 7 million subscribers in the quarter, easily beating its estimates - and Wall Street expectations - of 5 million. The company anticipates adding another 9.4 million subscribers during the fourth quarter, up 13% compared with the 8.3 million it added a year ago. Sales grew 34 per cent to US$4 billion, meeting Wall Street forecasts. "Even the USA number was better than I thought it would be".

Executives said audiences welcomed shows tailored to specific markets, such as "Sacred Games" in India, which the company identified as key to its expansion.

The firm's shares are have risen than 65% so far this year.

Media companies that once sold programs to Netflix for hundreds of millions of dollars are now building their own on-demand services to compete head on.

"More than 80 million accounts have watched one or more of the Summer of Love films globally and we are already in production for the next set of original rom-coms for our members", Hastings wrote. Netflix has prepared for this, beefing up global programming and production as it approaches a ceiling in the United States.

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