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Netflix shares racing after hours as new subscriber numbers beat expectations

The streaming group added 5.2mln new users in the three months..
Netflix shares racing after hours as new subscriber numbers beat expectations
Netflix reported after the bell

Netflix (NASDAQ:NFLX) shares raced up almost 10% after-hours as it posted second quarter earnings, which showed subcriptions rising sharply.

The streaming group added 5.2mln new users in the three months, far better than Wall Street's estimates of 3.23mld, during what was billed as a weaker quarter.

Revenue was $2.785 bn and net income $66mln - up about 50% from the same period last year.

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Netflix due to report after bell

Digital content streamer Netflix Inc (NASDAQ:NFLX) is reporting after the bell and, as ever, sUBScriber numbers to the service will be closely scrutinised.

As Proactive reported last month, revenues are expected to surge over the next five years as the firm sees the number of paid sUBScribers continue to grow across the globe, according to a report from the Digital TV Research.

The number of paid sUBScribers could reach 128 million by 2022, up 44% on the amount Netflix had at the end of 2016. sUBScription revenues are estimated to rise to US$14.9bn in 2022 from the $8.8bn reported in 2016.

In April this year, Netflix said it added 4.95 million new subcribers in the first quarter, 3.53 million of whom were overseas.

However, this fell short of expectations of 5.2 million users as it pushed back the release of its hit TV series, 'House of Cards', to the second quarter.

Traditionally, the second quarter has been a weaker period for new sign-up, and in 2016 shares were hit after the group's company’s second-quarter release, in which it reported adding 1.7 million sUBScribers, below expectations of 2.5 million net adds.

But Swiss broker UBS reckons the group will report 2.6 mln subscriber adds in this latest second quarter "due to a very strong original content slate and easy churn comparisons".

UBS rates shares a 'buy'..

UBS rates shares a 'buy' with a $175  price target, compared to a current price of around $161.

Shares in the tech firm are up nearly 28% in 2017 so far  and a very impressive over 61% in the last 12 months.

It is expected to report earnings of 16 cents a share in the latest three months, according to analysts surveyed by FactSet. 

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