MOVIE rental firm Netflix announced a surge in profits and revenues yesterday but saw its stock tumble after disappointing investors with its second quarter outlook.
It added 3.3m new customers in the quarter to overtake Comcast as the largest paid video service in the US with 23.6m subscribers. Year-on-year its global subscriber base has risen an astonishing 69 per cent.
First-quarter profits beat expectations, hitting $60.2m (£36m), up from $32.3m a year ago. Revenues rose 46 per cent to $719m, with analysts expecting $703.6m.
Gross margin for the quarter grew from 37.8 per cent to 39 per cent.
However, Netflix said it is likely to miss analyst forecasts for sent second quarter. That outlook sent its shares tumbling five per cent in after hours trading.
To attract more customers, Netflix has negotiated a glut of content agreements. Recent additions to its stable include a deal with Lionsgate for Mad Men, a Fox deal for Glee, and a two-year tie-up with CBS for shows including Cheers and Frasier.
The firm also attracts record rentals of hit movies including Oscar winners Crash and The Departed (right).
Netflix’s stock is up 43 per cent this year and reached an all-time high before the close of play in New York yesterday.