Netflix surges on user gains, strong profits

Alicia Cross
October 17, 2018

The news broke a previous streak of five straight quarters in which subscriber growth exceeded expectations.

The Los Gatos, California-based company said revenue jumped 34 percent to $4 billion, matching estimates of Wall Street analysts polled by Refinitiv.

The company has been one of the world's best-performing stocks because investors believe it has years of growth ahead.

The company expects to sign up 9.4 million new subscribers this quarter, far above the 7.18 million average of forecasts compiled by Bloomberg.

Of course, the quarter also attracted its share of controversy, including the debut of Insatiable, which earned accusations of fat-shaming. Most Wall Street analysts parrot the company's projection that it can grow from 130 million customers to 400 million subscribers, if not more.

Analysts estimate that it added about 676 hours of original programming in the U.S. in the most recent quarter, 135% more than in the same period a year earlier. Netflix expects to add 28.9 million customers this year, setting a new record for the 21-year-old company. Subscriber growth was stronger than expected in the USA and overseas.

During the September quarter, Netflix added about 676 hours of original programming in the United States, a 135 percent increase from a year earlier, according to Cowen and Co analysts.

Netflix has spent aggressively to develop original content to lure new subscribers despite tough competition from services offered by Amazon and other outlets.

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Netflix reported 1.09 million domestic subscriber additions, surpassing estimates of 673,800.

Netflix has staked its future growth on global markets.

Netflix revenue in the quarter increased 34% year-on-year to almost $4bn, while profits more than tripled to $403m. Walt Disney and AT&T, the owner of HBO and Warner Bros., have announced plans to sell new streaming services next year, while just released its biggest hit yet in "Jack Ryan".

Netflix has said it plans to invest some $8 billion in original content.

Netflix will then segue to a raft of high-end film offerings that spell its most serious push into Hollywood's competitive Oscar season.

Netflix's gains, including those that came in after-market trading Tuesday, have cleared $3.63 billion from the accounts of short sellers so far this year, Ihor Dusaniwsky, managing director at financial analytics firm S3 Partners, noted in a tweet.

"That's going to make it exciting for us, great for consumers and incredible for producers, " he said.

Other reports by Free-Prsite

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