Netflix, Inc.(NASDAQ:NFLX) Posts Winning Quarter

Netflix added 610,000 net new subscribers in its home U.S. market, helping revenue leap 47 percent to $876 million.

Shares rose 13 percent to trade above $107 in after-hours trading following the earnings report on Wednesday. They had ended at $95.04, up 2.6 percent, in the regular session on Nasdaq.

Earnings per share hit 73 cents, beating an average forecast of 55 cents.

Netflix shed more than 800,000 U.S. customers in the third quarter of 2011 after an uproar over a price hike and now-aborted plan to rent DVDs under the name Qwikster. The company’s share price plummeted from $304 in July to $62 in November.

In the letter to shareholders, Hastings – a Wall Street darling until last year’s slip-ups – stuck to previous forecasts of bumping up margins by about 1 percentage point every quarter as the company shifts customers from its DVD-by-mail service onto instant streaming.

To sustain that momentum, Netflix has been writing ever-heftier checks to acquire more TV shows and movies for its streaming service. On Wednesday, Hastings predicted that while content acquisition costs will continue to increase quarter by quarter, that pace of growth will begin decelerating in 2012.

Longer-term, Netflix still faces a deluge of competition, a tarnished brand, and a costly expansion that will erode bottom lines, at least in the short term.

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Posted by Shayne Heffernan on Jan 26th, 2012and filed underEquities, Latest News, Shayne Heffernan.You can follow any responses to this entry through theRSS 2.0Responses are currently closed, but you can trackback from your own site.