Netflix posts huge gains as subscriber growth soars

Markets Insider

Markets Insider

In the third quarter of 2017, Netflix earned $0.29 a share. The company issued revenue guidance of $4.2 billion, compared to the consensus revenue estimate of $4.23 billion.Netflix also updated its Q4 2018 guidance to $0.23-0.23 EPS. But despite those concerns, and last quarter's subscriber wobble, Netflix shares have risen 78% this year, as consumers continue to move away from traditional media and access more content online. "The latter has not developed at a pace that exceeds our expectations, which suggests upside is more limited". The figure rose about 7 million over the quarter.

Shares of Netflix (NFLX) skyrocket almost 10% in pre-market trading Wednesday after the streaming giant delivered third-quarter financial results that crushed Wall Street's expectations in an upside surprise.

The company added 7 million subscribers in the September, exceeding its conservative forecast for 5 million net additions to the service in the third quarter.

Analysts predicted 68 cents a share in earnings, according to FactSet.

"Given the decreasing efficiency of content and marketing spending, we are decreasing our global contribution profit estimates", he wrote.

"We recognize we are making huge cash investments in content, and we want to assure our investors that we have the same high confidence in the underlying economics as our cash investments in the past", Netflix said in its letter to shareholders.

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"Our own original shows tend to be more valuable than licensing someone else's shows in later windows", said Netflix's chief content officer, Ted Sarandos.

Total streaming net change for fourth quarter: 9.4 million. These new subscribers brings Netflix total subscribers to 137 million a userbase that is only behind YouTube's 192 million when looking at streaming services. Also, CFO David B. Wells sold 1,000 shares of the company's stock in a transaction that occurred on Monday, October 15th. During the same period past year, the firm posted $0.15 earnings per share. New York-based Jpmorgan Chase has invested 0.41% in Netflix, Inc.

In the quarter, Netflix gained 5.9 million new subscribers overseas and 1.1 million in the US.

In a coup, Netflix shows won 23 Emmys in last month's awards ceremony, tying HBO for the most among all TV networks.

There is more uncertainty ahead as competition moves in: Apple has been beefing up its offerings, and Disney is expected to debut its much-anticipated direct-to-consumer service next year. Streaming revenue increased 36 percent in the third quarter from a year earlier, though worldwide revenue was down $90 million due to year-over-year impact from currency.

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