Netflix shares leap after subscriber surge
Shares in online streaming service Netflix have risen 14% in after-hours trading after it reported its subscribers had increased by seven million.
The figures covering the July to September period took the company’s subscriber base to 137 million and reassured investors worried the company was facing a slowdown in its growth surge.
Net profit for the quarter more than tripled compared to the same period a year ago, from $130m to $403m, while revenues were up by 34% to $4bn.
Netflix is behind shows such as The Crown and Orange Is The New Black.
Its latest subscriber numbers were about a third higher than Wall Street had been predicting and helped to boost the stock after it had fallen short of expectations in the previous quarter.
The record number of additions in the latest period confirmed its rank as by far the world’s biggest online subscription video service.
Jim Nail, analyst at Forrester Research, said the latest figures suggested that the second quarter result had been an “aberration, likely the results of a somewhat low volume of new content”.
Netflix is investing more than $8bn in entertainment programming this year to lure new customers around the world.
It has been borrowing heavily to fund its rapid growth, issuing $7.5bn of bonds in less than three years – a strategy that could become more costly in a rising interest environment.
At the same time it faces competition from the likes of Amazon and Disney.
Sky plc, the owner of Sky News, earlier this year struck a partnership deal with Netflix.
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