Netflix Adds More Users Than Expected

By Tess Stynes 

Netflix Inc. said it added 4.05 million streaming subscribers globally in the fourth quarter, above the company's estimate of 4 million, boosted by a better-than-expected number of U.S. additions.

Shares of Netflix, which fell more than 19% following the company's previous quarterly report, rose more than 13% in after-hours trading as the report Tuesday eases concerns about subscriber growth.

The streaming-video service has bet big on a rapid international expansion as it faces growing domestic competition, such as rival HBO's plans to offer a stand-alone streaming service to U.S. consumers, without requiring a cable subscription.

In the U.S. and abroad, Netflix has been pursuing tie-ups with pay-TV operators. In the quarter, it sealed a deal with its biggest U.S. partner yet, satellite TV provider Dish Network Corp., to make Netflix's app available on Dish's latest set-top boxes.

In the latest quarter, the streaming TV and DVD-by-mail provider added 1.9 million U.S. streaming customers, compared with 2.33 million in the year-earlier quarter and above its forecast for 1.85 million U.S. customers.

For the first quarter, the company forecast that it would add 1.8 million new domestic customers, compared with 2.25 million in the first quarter of 2014.

In its international business, Netflix added 2.43 million subscribers, above its expectations for 2.15 million. The company added 1.74 million international subscribers a year earlier and 2.04 million in the third quarter.

For the first quarter, the company forecast that it would add 2.25 million new international streaming customers, compared with 1.75 million in the first quarter of 2014.

Overall, Netflix reported a profit of $83.4 million, or $1.35 a share, up from $48.4 million, or 79 cents a share, a year earlier. Excluding certain costs, per-share earnings were 72 cents a share in the latest quarter; the company said in October that it expected 44 cents a share.

Revenue increased to $1.48 million from $1.18 million, slightly below the estimate of $1.49 billion by analysts polled by Thomson Reuters.

For the current quarter, the company forecast per-share earnings of 60 cents a share. Analysts polled by Thomson Reuters expected per-share profit of 77 cents.

Write to Tess Stynes at [e-mail]

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