Netflix Inc snagged 8.33 million new streaming customers in the final quarter of last year — 2 million more than Wall Street expected — as the pioneering online video service kept pouring money into programming in a race to dominate Internet TV around the world.
The results cheered investors, who drove Netflix shares up 7.8 percent to a record high of US$245.16 in after-hours trading on Monday, hitting a market capitalization of more than US$100 billion for the first time.
Tech companies have been driving much of the US stock market’s record-breaking rally this month, with Netflix shares up 15 percent this year before Monday after rallying 53 percent last year.
After signing up more than half of all US broadband households, Netflix is building its customer base in 190 countries, with investors expecting that billions in investments can begin delivering steady profits.
The company’s quarterly earnings report showed interest is growing.
Netflix picked up 6.36 million subscribers in international markets from October last year through last month, when it released new seasons of critically acclaimed shows Stranger Things and The Crown, as well as action movie Bright.
That topped Wall Street expectations of 5.1 million, according to FactSet Research Systems Inc.
Along with 1.98 million subscriber additions in the US, the company ended the year with 117.58 million streaming subscribers around the globe.
Netflix turned a DVD-by-mail business into an online competitor of movie channel HBO. As it grew, it began licensing its own original shows to ensure a stream of new offerings if studio suppliers ended deals.
In fact, Walt Disney Co is making a major push into online streaming and is to pull its first-run shows and movies from Netflix next year as Hollywood fights for audiences.
Netflix plans to spend up to US$8 billion this year on TV shows and movies to fend off Disney, Amazon.com Inc, studios-owned Hulu and local competitors that are jumping into online video.
Last year, Netflix recorded its first full-year profit in international markets.
The company has said it is aiming for steady improvements in profitability overseas this year.
In October, Netflix raised prices for two of its three main subscription plans to help fund the substantial content investment, helping to drive revenue higher.
In the fourth quarter, Netflix reported diluted earnings per share of US$0.41, in line with the expectations of analysts polled by Thomson Reuters I/B/E/S.
Revenue for the three months totaled US$3.286 billion, in line with forecasts.
Looking ahead, Netflix forecast streaming subscriber additions of 6.35 million for the first quarter of this year, more than analysts’ expectation of 5.01 million, according to FactSet.
Investors appear confident in Netflix’s ability to grow.
Netflix traded at 91 times expected earnings for the next 12 months, versus Amazon at 152 times earnings and Disney at 17 times earnings, Thomson Reuters data showed.
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