Netflix Beats Subscriber Target, Guides Higher For December Quarter

 Netflix Beats Subscriber Target, Guides Higher For December Quarter

Internet television network Netflix (NFLX) late Tuesday said it added more subscribers than expected in the third quarter. But Netflix stock wavered in extended trading.




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The Los Gatos, Calif.-based company added 4.38 million new streaming subscribers in the September quarter. Analysts expected Netflix to add 3.78 million subscribers, vs. the company’s own forecast for 3.5 million.

Netflix ended the third quarter with 213.56 million streaming subscribers worldwide.

For the current quarter, Netflix is targeting 8.5 million new subscribers. Wall Street had expected 8.41 million additional subscribers in the December quarter, according to FactSet.

Netflix Stock Wavers Late

In after-hours trading on the stock market today, Netflix stock alternated between modest gains and losses. During the regular session Tuesday, Netflix stock rose 0.2% to close at 639.

Netflix earned $3.19 a share on sales of $7.48 billion in the third quarter. Analysts were looking for Netflix earnings of $2.56 a share on sales of $7.48 billion, FactSet said. On a year-over-year basis, earnings jumped 83% while sales climbed 16%.

For the current quarter, Netflix expects to earn 80 cents a share on sales of $7.71 billion. Wall Street had predicted Netflix earnings of $1.13 a share on sales of $7.66 billion in the fourth quarter, FactSet said.

“After a lighter-than-normal content slate in Q1 and Q2 due to Covid-related production delays in 2020, we are seeing the positive effects of a stronger slate in the second half of the year,” Netflix management said in a letter to shareholders. “We’re very excited to finish the year with what we expect to be our strongest Q4 content offering yet.”

‘Squid Game’ Boost

Netflix got a boost late in the quarter from the release of global hit series “Squid Game” from South Korea.

The Asia-Pacific region was the largest contributor to membership growth in the third quarter. The region added 2.2 million subscribers, or half of the quarter’s total net adds.

Netflix stock has been surging in recent weeks amid reports about big viewership numbers for “Squid Game.” A “mind-boggling” 142 million households worldwide watched the show in its first four weeks, Netflix said Tuesday.

Other popular programming in the quarter included new seasons of “Money Heist” and “Sex Education” as well as Danish thriller “The Chestnut Man.”

On Sept. 2, Netflix stock touched a buy point of 593.39 out of a 31-week consolidation period, according to IBD MarketSmith charts.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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