Netflix Stock Up 7% On Strong Subscriber Additions

(RTTNews) - Online-video streaming service Netflix Inc. (NFLX), Monday reported a first-quarter profit that surged from last year as revenues grew driven largely by strong subscriber additions. Shares surged 7 percent in the after-hours trading.

Netflix added 7.41 million subscribers globally in the quarter, easily beating its forecast of 6.35 million, to end the quarter with 125.0 million subscribers. The company added 1.96 million customers in the U.S. during the quarter, above its estimates of 1.45 million. International subscriber additions were 5.46 million, far above its expectation of 4.90 million.

The company said its was able to increase its subscriber count due to continued strong acquisition trends across the globe attributable to the growing breadth of its content and the worldwide adoption of internet entertainment.

Looking forward to the second quarter, Netflix expects to add 6.20 million memberships, with 1.20 million in the U.S. and 5.00 million internationally.

Los Gatos, California-based Netflix's first-quarter profit surged to $290.1 million or $0.64 per share from $178.2 million or $0.40 per share last year. On average, 39 analysts polled by Thomson Reuters expected earnings of $0.64 per share for the quarter.

Netflix's revenues for the quarter rose to $3.70 billion from $2.64 billion last year. Analysts had a consensus revenue estimate of $3.69 billion for the quarter.

The video-streaming service provider said revenue growth of 43 percent was achieved largely due to a 25 percent increase in average paid streaming memberships and a 14 percent rise in average selling price.

Looking forward, the company said "Q2 operating margin is expected to be 12%. We are now targeting a full year operating margin of 10%-11%. We continue to anticipate content and marketing spend to be weighted towards the second half of 2018."

NFLX closed Monday's trading at $307.78, down $3.87 or 1.24%, on the Nasdaq. The stock, however, gained $20.09 or 6.53%.