The online television company keeps adding domestic subscribers at a steady clip, but international additions are even better, and the outlook is good -- especially for investors focused on profit. October 21, 2013 1:30 PM PDT Netflix CEO Reed Hastings during a live-streamed earnings discussion after second-quarter results were released in July. (Credit: Screenshot by Joan E. Solsman/CNET) Netflix third-quarter profit surged again, as it added more domestic subscribers -- and even more subscribers internationally. Shares in the company were up about 10 percent to $392 after hours as its profit outlook for the current quarter blew past expectations. Netflix added 1.29 million new U.S. streaming customers in the second quarter, for a total of 31.09 million. In July, it had predicted 30.5 million to 31.3 million for the third quarter. Hype around Netflix original series, which have hit their stride with its first primetime Emmy wins and a chorus of word-of-mouth praise for prison dramedy "Orange Is the New Black," had hopes running high about additions. Its international subscriber ranks swelled by 1.44 million to 9.19 million, beating its July prediction for 8.3 to 9 million members. Despite all the attention paid to Netflix's originals strategy, which takes up a fraction of its content budget, the company is pouring all its domestic profits into international expansion. It's important for Netflix to build up awareness of its service abroad, if it wants to keep growing, as its ability to grow in the U.S. starts to bump up against its saturation point. Related stories Netflix set to cruise past HBO in subscribers -- analyst Samsung $150 smart box packs in streaming apps, cable Netflix to test extra features for its original shows Next in Netflix's originals queue: A thriller from 'Damages' team Nokia to lump free year of Netflix with some Lumia sales Looking ahead, it expect more subscriber growth in the current period. It projected 32.7 million to 33.5 domestic and 10.1 to 10.9 million international customers for the fourth quarter. Hastings has said he envisions Netflix reaching 60 million to 90 million U.S. customers eventually, which would lap the subscriber ranks of HBO a few times over. More importantly for investors, Netflix predicted as much as 73 cents per share in earnings in the current quarter. On average, Wall Street analysts who follow Netflix were only expecting 46 cents on average. Overall, Netflix reported a profit of $31.8 million, or 52 cents a share, compared with $7.7 million, or 13 cents a share, a year earlier. Revenue climbed 22% percent to $1.11 billion. The 52-cents-per-share result was better than Wall Street analysts were expecting on the whole, while revenue was slightly in line with expectations. Netflix will hold a live video discussion moderated by two analysts, who will pitch questions at Hastings they've collected from submissions by email and Twitter. It will start streaming on Netflix's investor relations' web site at 2 p.m. PT.
The online television company keeps adding domestic subscribers at a steady clip, but international additions are even better, and the outlook is good -- especially for investors focused on profit.
Netflix CEO Reed Hastings during a live-streamed earnings discussion after second-quarter results were released in July.
(Credit: Screenshot by Joan E. Solsman/CNET)
Netflix third-quarter profit surged again, as it added more domestic subscribers -- and even more subscribers internationally.
Shares in the company were up about 10 percent to $392 after hours as its profit outlook for the current quarter blew past expectations.
Netflix added 1.29 million new U.S. streaming customers in the second quarter, for a total of 31.09 million. In July, it had predicted 30.5 million to 31.3 million for the third quarter. Hype around Netflix original series, which have hit their stride with its first primetime Emmy wins and a chorus of word-of-mouth praise for prison dramedy "Orange Is the New Black," had hopes running high about additions.
Its international subscriber ranks swelled by 1.44 million to 9.19 million, beating its July prediction for 8.3 to 9 million members.
Despite all the attention paid to Netflix's originals strategy, which takes up a fraction of its content budget, the company is pouring all its domestic profits into international expansion. It's important for Netflix to build up awareness of its service abroad, if it wants to keep growing, as its ability to grow in the U.S. starts to bump up against its saturation point.
Related stories
- Netflix set to cruise past HBO in subscribers -- analyst
- Samsung $150 smart box packs in streaming apps, cable
- Netflix to test extra features for its original shows
- Next in Netflix's originals queue: A thriller from 'Damages' team
- Nokia to lump free year of Netflix with some Lumia sales
Looking ahead, it expect more subscriber growth in the current period. It projected 32.7 million to 33.5 domestic and 10.1 to 10.9 million international customers for the fourth quarter. Hastings has said he envisions Netflix reaching 60 million to 90 million U.S. customers eventually, which would lap the subscriber ranks of HBO a few times over.
More importantly for investors, Netflix predicted as much as 73 cents per share in earnings in the current quarter. On average, Wall Street analysts who follow Netflix were only expecting 46 cents on average.
Overall, Netflix reported a profit of $31.8 million, or 52 cents a share, compared with $7.7 million, or 13 cents a share, a year earlier. Revenue climbed 22% percent to $1.11 billion.
The 52-cents-per-share result was better than Wall Street analysts were expecting on the whole, while revenue was slightly in line with expectations.
Netflix will hold a live video discussion moderated by two analysts, who will pitch questions at Hastings they've collected from submissions by email and Twitter. It will start streaming on Netflix's investor relations' web site at 2 p.m. PT.
