The world’s largest video streaming company – Netflix, Inc. (NASDAQ:NFLX) – continues to be the darling of investors thanks to its robust earnings announcement for the fourth quarter and an optimistic outlook. NFLX was a high-flying stock in 2013 and was the top performer in the S&P 500 and Nasdaq 100, surging nearly 300% on the year, and there is plenty of hope that this trend can continue in 2014 as well.
Netflix Earnings in Detail
The company surpassed our estimates on both earnings and revenues on an expanding subscriber base. Earnings at NFLX jumped six fold to 79 cents per share in Q4, comfortably beating the Zacks Consensus Estimate of 65 cents. Revenues climbed 24% to $1.18 billion and outpaced our estimate of $1.166 billion.
Netflix added 2.33 million domestic and 1.74 million international subscribers, thus having a total customer base of 44.35 million. The number was well above management expectations of 2 million and 1.3 million for domestic and international subscribers, respectively.
Subscriber gains at home were credited to continued growth in Internet video, strong sales of Internet-connected devices, service improvements and effective marketing (read: Top Ranked Internet ETF in Focus: FDN).
The company provided an upbeat guidance for the first quarter of 2014. It expects earnings per share to come in at 78 cents, which is in-line with the Zacks Consensus Estimate. Additionally, subscriber growth continues to gain momentum with the expected addition of 2.25 million in the U.S. and 1.6 million internationally. This would bring the total subscriber base to more than 48 million in the first quarter.
Amid stiff competitive pressures, Netflix has maintained its lead in online video streaming as it continues to expand its original content offerings and plans to launch more television shows and movies.
This includes a new season of Lilyhammer, House of Cards, Orange Is the New Black and Hemlock Grove; final season of The Killing; a new slate of cartoons from DreamWorks Animation; a Marco Polo series from the Weinstein Co and many others. These will be accretive to subscriber growth going forward.
Further, Netflix is seeking to expand in international markets, in particular Europe. The company is also exploring new pricing strategies that would likely drive revenues and profits higher.
Moreover, Netflix currently has a Zacks Rank #2 (Buy) and a solid Zacks Industry Rank in the top 35% which adds to the bullish outlook and suggests good trading ahead.
Driven by huge earnings beat, robust subscriber gains and a bullish outlook, NFLX shares soared about 18% in after-hours trading on Wednesday. This has spread more optimism into the stock’s future.(...)Click here to continue reading the original ETFDailyNews.com article: Netflix, Inc. (NFLX): ETFs To Play On The Earnings BeatYou are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)
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