Netflix Flying After Earnings Beat; Stock Up 21%

Netflix

released its fourth quarter earnings results on Wednesday after the closing bell. The company reported net income of $40.7 million or $0.73 per share, compared to $47.1 million or $0.87 per share, in the year ago period. This crushed Wall Street earnings per share estimates of $0.55. Revenues at the company were up 47% to $875.6 million, versus analysts' consensus estimates of $857.89 million. In the quarter, Netflix added 600,000 unique domestic members to bring its total to 24.4 million. Gross margins fell to 34.3 percent versus 34.4 percent in last year's fourth quarter. CEO Reed Hastings said, "As expected, DVD members declined this quarter to 11.2 million due to the continued impact of the price changes, as hybrid members continued to predominantly choose a streaming-only plan over a higher priced hybrid plan. We added over 600 thousand unique domestic members in fourth quarter, ending the quarter with 24.4 million." Looking ahead to the first quarter Netflix expects that domestic streaming subscriptions will rise to a range of 22.8 million to 23.6 million while DVD subscriptions are anticipated to fall to between 9.4 million and 10 million. On the international front, Netflix expects streaming subscribers to range from 2.5 million to 3.1 million versus 1.86 million at the end of the fourth quarter. In Q1, the company sees a net loss between $27 million or $0.49 per share, and $9 million or $0.16 per share. Wall Street analysts are currently projecting that NFLX will report a net loss of $0.30 per share in the fiscal first quarter. During Thursday's trading session, NFLX shares have surged after the mostly upbeat report. The stock is up more than 21% to $115.64 on massive volume. As some of the pessimism surrounding the name has begun to lift, NFLX has jumped roughly 60% in just the last month.