That company that used to mail you a red envelope with a new DVD every week? Yeah, those guys: Netflix (NFLX). They now have 44 million subscribers and brought in $1.175 billion in their Q4 of 2013. Earnings per share (EPS) reached 79 cents. Both of these beat what the market was expecting, especially on the earnings side, which was a 21.5% positive surprise.
What's more, Netflix raised guidance for fiscal 2014, expecting bigger numbers in streaming subscribers for both the U.S. and International businesses than analysts had been expecting. The company's Q1 guidance is in range with the Zacks Consensus Estimates, allowing for another positive surprise next quarter.
Almost feels like a vintage Apple (AAPL) quarterly earnings post, doesn't it?
Going back to a year ago when Netflix put up a 208% positive surprise, NFLX shares have been off to the races. And now, just as there seems to have been some trepidation in the market whether Netflix can keep scaling these impressive heights, they go ahead and have another gangbusters quarter and increase the amount of subscribers they expect going forward. Further, though net neutrality is now to perhaps be a concern for companies like Netflix, CEO Reed Hastings addressed this directly and suggested it will not be an issue for Netflix.
So while we had seen NFLX shares down around 9% for the first three weeks of 2014, regular Wednesday trading saw the stock price rise another 1.5% before a new surge in the after-session: up 16% since the bell on the latest blowout earnings numbers. Netflix is at heart an entertainment company, but these days it looks more like the star of the show.
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