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Netflix Shares Jump Close To 30% After Hours

Netflix Shares Jump

Netflix closed the fourth quarter in excellent fashion. They posted revenues and subscriber numbers significantly higher than estimates by analysts. Investors responded in after hours trading by driving the stock price up by 25 percent.

In its fourth-quarter 2012 Netflix earnings report, the company noticed a large revnue increase. One year ago,revenue was $876 milllion. This year, it was $945 million for the quarter. It also reported Netflix earnings of 13 cents share. That was well above analyst expectations for a loss of $0.12 a share.

As in previous quarters, much of Wall Street’s focus is on Netflix’s subscriber growth domestically. The fourth quarter is typically the biggest for adding new users. New subscribers sign up during the holidays because they receive new, Netflix-compatible gifts. Netflix added 2 million U.S. new subscribers for the quarter, compared to 220,000 in the prior year’s fourth quarter. Its own forecast was 1.3 million new adds during the period.

Netflix said its improved domestic subscriber numbers were considerable because of new users and connected devices in the quarter, as well as improved retention. Netflix continues to keep subscribers through continued growth in the content amount viewed by each member. It expects to carry this subscriber momentum into the first quarter.

Overseas, Netflix added 1.8 million new subscribers, bringing its total customer count overseas to 6.1 million. International revenue increased to over $100 million for the quarter. Netflix expects losses to decline as new subscribers grow beyond content costs.

All of that good news shows that Netflix is once again in the good graces of investors. The company often sees volatile trading over an earnings report similar to what we are seeing today.

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