Netflix stock soars as company obliterates expectations

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(FinancialPress) — Netflix, Inc. (NFLX) rose a full 9% in after-hours trading after its Q4 earnings report revealed a much more dramatic rise in subscribers than anticipated by Wall Street. The company‘s guidance for Q1 2018 was also deemed impressive by markets.

BY THE NUMBERS

The streaming platform‘s stock had already reached a record high by Monday‘s session closing, in anticipation of its earnings report for the last quarter of 2017. Added to that, once the report came out, the effect on after-hours trading was so dramatic that the Los Gatos, California-based company‘s market valuation finally broke the $100 billion landmark.

Earnings per share reached $0.41 on a $3.29 billion revenue for the last fiscal quarter of the year. FactSet consensus figures stood close, with per-share earnings expected at $0.41 and revenue at $3.28 billion. YOY revenue rose 32.6% and earnings per share rose 174% over the same period.

However, the main number that the market looks at when these reports come out is the number of new subscribers to the platform in the previous quarter – a fact well known by more seasoned NFLX shareholders. New subscribers are traditionally seen as small, individual and never-ending streams of new revenue.

The coveted number stood at a staggering 8.33 million new customers – making the overall number reach 117.58 million worldwide. New international subscribers reached the 6.36 million mark, 1.31 million over forecast.

FactSet surveys had much lower expectations – 6.37 million new clients, to be precise. Therefore, the actual number completely obliterated expectations.

“The big driver was subscriber growth. International growth was astonishing,” says Scott Freeze, chief investment officer of Sabretooth Advisors International adds came in at 6.36 million versus 5.05 million expected.

The guidance for Q1 2018 was set at $0.63 EPS and revenue of $3.686 billion. The FactSet consensus survey only expected an EPS of $.054 and $3.487 billion in revenue.

NFLX also guided for EPS of 63 cents on revenue of $3.686 billion in the first quarter of 2018, breezing past the FactSet consensus, which called for EPS of 54 cents and revenue of $3.487 billion.

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