Netflix, record profits at 2.36 billion and 5 million new subscribers
Earnings per share were $5.40, above the expected $5.12. Revenues rose 15% to $9.83 billion. Share price rises 5% in after-market trading
3' min read
3' min read
Netflix ended the third quarter beating analysts' expectations and posting record profits of $2.36 billion, up 41 per cent. Earnings per share came in at $5.40, above the $5.12 expected by the market. Revenues rose 15 per cent to $9.83 billion.
New subscribers totalled 5.07 million, themselves above the expected 4.52 million, although less than the more than 8.76 million in the same three months last year. Total global subscriber ranks reached 282.7 million, and the company boasts the fewest defections in the industry. Netflix shares climbed in after-hours trading, where they gained 5 per cent, continuing a run that has seen them gain 46 per cent since the start of the year.
Netflix predicted a slowdown in profits to 1.85 billion in the current quarter, the fourth of the year. But it has since eclipsed expectations on every major financial metric. The operating margin rose to 29.6% from 22.4%, more than the 28.1% expected. The profitability, which confirms its position as a leader in streaming services, is the result of strength in programming and innovation in content, despite being recue by obstacles related to strikes in Hollywood. Among the most significant innovations are live events and entry into gaming. Next month it will broadcast a boxing match with former champion Mike Tyson and at Christmas it has scheduled two matches of the Nfl American football championship, the US sport par excellence.
Business reforms have also paid off in the budget, from price increases to the arrival of advertising and crackdowns on password sharing. Even the least brilliant of the services, the low-cost one, $6.99 per month with advertisements, is doing better, the company said, with 35 per cent growth and half of the new subscribers on the dive sites available.
New price increases that should help performance are just around the corner: increases will be triggered from today in Italy and Spain, after having occurred in other European countries, the Middle East and Africa. It will then phase out one of its cheapest plans in Brazil by the end of this quarter.
