Netflix surprised Wall Street with a surprise profit of 13 cents per share on Wednesday, while analysts expected a loss of the same amount for the fourth quarter.
Shares jumped 34% in extended trading after the earnings announcement. Netflix booked $ 945 million in revenue in the quarter, which also beat analysts' estimates.Investors were pleasantly surprised by the number of new subscribers streaming Americans. Netflix (NFLX) registered 2.05 million in the fourth quarter, above the range of the company predicted last quarter. That brings the total U.S. subscriber additions streaming to 5.48 million by 2012.In total, Netflix now has 27.2 million subscribers in the U.S. streaming and 6.1 million in other global markets. Netflix DVD mail subscriptions continue to decline, from 380,000 in the U.S. to about 8.2 million.The company said its first-quarter earnings could be as high as $ 14 million, but that's just a balance. Nonprofits still be better than consensus estimates: Analysts forecast a loss.Netflix has been working to add new content to subscriber allay concerns that its streaming catalog is stale. It
signed an agreement with Disney (DIS, Fortune 500) in December, but new
versions of film studies will not be available for another three years.Netflix
signed two new agreements this month with CNNMoney parent company Time
Warner (TWX, Fortune 500) for the previous seasons of programs of
Turner Broadcasting and Warner Bros., including "The West Wing" and
Cartoon Network content. On
Wednesday, the company also referred to the original series, including
Kevin Spacey "House of Cards", another season of "Lilyhammer" and a
revival of "Arrested Development."Netflix said it is exploring the possibility of issuing debt to raise capital and fund more original programs."It
is very good time to lock in a low cost and long-term capital," CEO
Reed Hastings said in a conference call with analysts after earnings. "We would be remiss in not looking at that opportunity."One analyst asked where he thinks Hastings "holes" exist in the catalog of Netflix."Not much more than holes, there is a lot of content that we acquire as we continue to grow," said Hastings. "[But] there is no specific holes. We would like to have more movies, more pre-season television ..."
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