Shares in Netflix rose as much as much as nine per cent in after-hours trading as the streaming giant’s third-quarter profit beat analysts’ forecasts.
Netflix today reported net profit of $665m (£518.5m) in the three months to the end of September, up almost 40 per cent on the same period last year. Earnings per share hit $1.47, well ahead of analyst estimates of $1.04.
The streaming firm added 6.8m paid subscribers over the period, thanks to the launch of new hit series such as Stranger Things and 13 Reasons Why, though this was below the company’s own forecast of 7m.
Revenue rose 31 per cent on last year to hit $5.24bn, but fell short of the $5.25 expected, according to data from Refinitiv.
The quarterly results will be the last time Netflix posts results before the eagerly-anticipated launch of rival streaming services from Disney and Apple.
The prospect of tough new competition in the on-demand video market, combined with disappointing subscriber additions in the second quarter, has prompted its shares to drop almost 25 per cent in the last three months.
“These results clearly show a company that is now moving into a different operating phase and for this reason must evolve,” said media analyst Paolo Pescatore.
“Netflix must grow its revenue; either by increasing subscribers at a faster rate, increase prices or by diversifying into new areas.”
Netflix forecast fourth-quarter revenue of $5.4bn and earnings per share of $0.51. The company said it expected to add 7.6m subscribers in the quarter leading up to Christmas, a sharp drop on the 8.8m it added in the same period last year.
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