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Netflix Shares Rise On Surprisingly Strong Q4 Sub Growth

Deadline logo Deadline 1/18/2017 David Lieberman
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Netflix credits original shows including The Crown, Marvel’s Luke Cage, and Gilmore Girls for the stronger than expected growth in subscribers in Q4 — numbers that helped to lift the stock price by nearly 8% in post-market trading.

If that continues tomorrow then Netflix stock will hit an all-time high.

The company reported $67 million in net income, up 55.2% vs the period last year, on revenues of $2.48 billion, up 36.0%. Analysts expected the top line to hit $2.47 billion. Earnings at 15 cents a share also topped predictions for 13 cents.

But subscriptions were the eye-openers. The company says it added 1.93 million domestic subscribers, raising the total to 49.43 million. The Street expected 1.44 million additions.

And the international business added 5.12 million members for a total of 44.37 million. Analysts looked for 3.74 million new customers here.

The company says it expects to add 1.5 million domestic members in the current quarter, and 3.7 million overseas.

“We are learning rapidly how best to match content with audience tastes around the world,” CEO Reed Hastings says in a letter to shareholders. “It is clear to us that high quality content travels well across borders.”

The company says it plans to invest more than $6 billion on content this year, up from $5 billion in 2016.

He adds that if the Trump administration and GOP-led Congress weaken net neutrality laws then it “is unlikely to materially affect our domestic margins or service quality.” Netyflix is “now popular enough with consumers to keep our relationships with ISPs stable.”

Hastings adds, though, that he hopes lawmakers “recognize that keeping the network neutral drives job growth and innovation.”

Meanwhile competition is intensifying around the globe in internet video, he says.

The BBC “has become the first major linear network to announce plans to go binge-first with new seasons, favoring internet over linear viewers,” Hastings says. “We presume HBO is not far behind the BBC.”

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