Internet TV network Netflix late Wednesday smashed expectations for new subscribers in the third quarter. Netflix stock jumped in extended trading.
The Los Gatos, Calif.-based company added 8.76 million subscribers in the September quarter. Analysts polled by FactSet had expected Netflix to add 6.06 million subscribers in the period. Netflix ended the third quarter with 247.15 million subscribers worldwide.
Netflix earned $3.73 a share on sales of $8.54 billion in the third quarter. Analysts had called for earnings of $3.49 a share on sales of $8.54 billion. On a year-over-year basis, Netflix earnings rose 20% while sales climbed 8%.
However, Netflix's financial guidance for the fourth quarter was a tad below Wall Street's targets.
For the current quarter, Netflix predicted earnings of $2.15 a share on sales of $8.69 billion. Analysts had been looking for earnings of $2.17 a share on sales of $8.78 billion in the fourth quarter. In the year-earlier period, Netflix earned 12 cents a share on sales of $7.85 billion.
Netflix Stock Pops After Report
In after-hours trading on the stock market today, Netflix stock surged 12.5% to 389.35. During the regular session Wednesday, Netflix stock dropped 2.7% to close at 346.19.
Netflix stock had slumped ahead of the company's earnings report over several concerns, including a slower-than-expected ramp in advertising revenue, a weaker content slate and declining average revenue per membership.
Netflix cited its lower-priced, ad-supported service as well as its crackdown on account sharing for the boost in subscribers in the third quarter.
Netflix also announced price increases for its service plans in the U.S., U.K. and France. In the U.S., the company's ad-free, basic plan is now $11.99 while the premium plan is $22.99.
Meanwhile, average revenue per membership declined 1% year over year in Q3. Netflix blamed the decline on a higher percentage of membership growth from poorer countries and limited price increases over the past 18 months.
Top-rated Netflix TV series in the period included "Love Is Blind," "Dear Child," "One Piece" and licensed show "Suits."
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