Netflix, Inc. (NFLX) Shares Surge After Earnings Beat


Netflix, Inc. (NASDAQ:NFLX) has done it again. The company posted yet another earnings beat, and shares are soaring in after-hours trading. They’re up more than 18% as of this writing. Netflix reported sales of $1.18 billion for the December quarter and earnings of 79 cents per share. The company also added 2.4 million domestic streaming subscribers, bringing its total U.S. subscribership up to 33.4 million.

Examining Netflix’s results

Analysts had been expecting the company to report earnings of 66 cents per share on revenue of $1.17 billion. In the same quarter a year ago, Netflix, Inc. (NASDAQ:NFLX) reported earnings of just 13 cents per share on sales of $945 million.

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The company estimates that it will add 3.85 million additional new subscribers in the current quarter, including 2.25 million domestic additions and 1.6 million internationally. Subscriber growth is one of the key metrics analysts and investors look at in determining how well Netflix, Inc. (NASDAQ:NFLX) will do going forward, and the fact that the company not only surprised in the December quarter, but also in its guidance, may be a solid reason so many investors are sending shares soaring right now.

Netflix looks ahead

One of the topics which analysts have been talking about for some time is price increases at Netflix, Inc. (NASDAQ:NFLX). The company said in its shareholder letter today that they’re moving toward offering new members three different plan options. It also said that if it does ever make changes in prices for new members, existing members would receive “generous grandfathering of their existing plans and prices.”

In the company’s shareholder letter today, it also noted that it continued to spend on content and that during the current quarter, it may raise $400 million more in long-term debt in a plan similar to their $500 million raise last year. Netflix, Inc. (NASDAQ:NFLX) emphasized that with $900 million in total long-term debt, their debt to equity ratio would still be modest.

In addition, Netflix said it’s continuing its expansion into international markets and will specifically target Europe this year.