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Netflix, Inc. (NFLX) 3Q 17 Earnings Send Shares Higher After Hours

Netflix 3Q 17 earnings were released after closing bell tonight, and the company reported earnings of 29 cents per share on $2.985 billion in revenue. Analysts had been expecting earnings of 32 cents per share on $2.97 billion in revenue. In the year-ago quarter, Netflix posted 12 cents per share in earnings on $2.29 billion in revenue.

Netflix 3Q 17 Earnings
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Streaming revenue rose 33$ to $2.875 billion from $2.158 billion a year ago. Netflix’s streaming obligations rose to $17 billion from $14.4 billion in the year-ago quarter and $15.7 billion in the previous quarter.

The company added 5.3 million net new streaming subscribers during the third quarter, compared to the 3.6 million it added a year ago. Netflix added 104.02 million paid streaming memberships and 109.25 million total streaming memberships. In the U.S., net streaming subscriber adds amounted to 850,000, while international net streaming adds amounted to 4.45 million, versus 370,000 and 3.32 million, respectively, in the year-ago quarter.

Leading up to the Netflix 3Q 17 earnings release this afternoon, short interest in the company climbed as bearish bets increased. Data from financial analytics firm S3 Partners reveals that short interest in Netflix has climbed the most within the last week as short-sellers added $184 billion to their bets against the firm today alone and $316 million within the last week. The firm’s research head Ihor Dusaniwsky said ahead of the print that Netflix is the sixth most-shorted U.S. stock.

Before the Netflix 3Q 17 earnings report this afternoon, the company’s stock closed at a record high, so it seems the buy-side had just as much conviction as the sell-side. According to Dusaniwsky, Netflix short-sellers racked up more than $2 billion in mark-to-market losses so far this year, with their positions losing 49% year to date. He believes short-sellers are predicting that the company’s subscriber growth will weaken again due to the company’s subscription price increase.

For the fourth quarter, Netflix projects $3.274 billion in revenue and 41 cents per share in earnings. It expects total streaming revenue to grow to $3.169 billion from $2.351 billion in last year’s fourth quarter. The company guided for 6.3 million net subscriber adds in the quarter, including 1.25 million domestic and 5.05 million international subscribers.

After Netflix 3Q 17 earnings were released, the company’s stock jumped by as much as 2.48% to $207.33 in after-hours trades.

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