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updated: 10/22/2013 9:45 AM

Netflix's 3Q earnings quadruple, stock soars

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  • Netflix's earnings quadrupled as its line-up of original programming helped the Internet video subscription service attract 1.3 million more U.S. subscribers during its latest quarter.

      Netflix's earnings quadrupled as its line-up of original programming helped the Internet video subscription service attract 1.3 million more U.S. subscribers during its latest quarter.
    Associated Press

 
Associated Press

SAN JOSE, Calif. -- Netflix's earnings quadrupled as its line-up of original programming helped the Internet video subscription service attract 1.3 million more U.S. subscribers during its latest quarter.

The third-quarter results announced Monday are the latest evidence of Netflix's increasing popularity. The Los Gatos, Calif. company ended September with 31.1 million U.S. subscribers, eclipsing the estimated 29 million subscribers that HBO's 41-year-old pay-TV channel is believed to have in the country.

HBO, which is owned by Time Warner Inc., still has a commanding lead globally with 114 million subscribers around the world.

Netflix Inc., in contrast, has 40.3 million subscribers worldwide after adding 1.44 million customers outside the U.S. in the July-September quarter. The company's streaming service is available in 41 countries, and Netflix plans to enter another yet-to-be identified overseas market next year.

Netflix earned $32 million, or 52 cents per share, in the quarter. That compared with income of $7.7 million, or 13 cents per share, at the same time last year.

Analysts surveyed by FactSet had forecast earnings of 48 cents per share.

Revenue rose 22 percent from last year to $1.1 billion to match analyst projections.

Netflix expects to add another 2.5 million to 4.1 million subscribers worldwide in the current quarter ending in December, including an additional 1.6 million to 2.4 million in the U.S.

Investors increasingly view Netflix as the leader in a technology upheaval that is redefining the entertainment landscape for decades to come. The company has been steadily winning new converts to an $8-per-month service that streams TV shows and movies to any device with an Internet connection. Some households have become so enamored with Netflix that they are canceling more expensive subscriptions to cable- and satellite-TV services.

Netflix's latest report was a hit on Wall Street. Netflix's stock soared $36.51, or more than 10 percent, to $391.50 in extended trading after the numbers came out. That puts the shares on course for another record high in Tuesday's regular session and means the stock has more than quadrupled in value this year.

The third quarter covered a three-month stretch ending in September that featured the debut of two series that could only be seen on Netflix. They were the critically acclaimed "Orange Is The New Black," and "Derek," which also got largely positive reviews. In a Monday letter reviewing the third quarter, Netflix predicted "Orange Is The New Black" will end this year as its most-watched piece of original programming yet, outstripping "House of Cards," a hit released earlier this year that won three Emmy awards.

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