Netflix Blows Out Wall Street Estimates, Shares Surge 35 Percent
All this good news sent Netflix shares through the roof; in after-hours trading yesterday, Netflix’s stock price shot up 35%.
The reason for this unexpected profit and subsequent stock price increase? "We just saw tremendous growth over the holidays," Netflix CEO Reed Hastings told Reuters.
Of course, not every bit of Netflix financial news is positive. Reuters reports that the company’s annual net profit is down substantially from last year (from $3.6 billion to just $17 million) due to higher company costs, and its DVD mail rental service keeps losing subscribers--380,000 cancelled that service in the final quarter of 2012.
That said, Netflix is spending money to improve its business, such as a multi-year partnership with Disney, and it expects serious growth on the streaming side of things in the first quarter of 2013. Reed Hastings is probably sleeping very well at night these days.