Netflix Explodes on Third Quarter Financial Results

Shares of streaming giant Netflix were on a tear on Wednesday after the company reported third quarter financial results.

For the quarter, Netflix beat on earnings but missed revenue expectations. Wall Street must have been excited over the company beating analysts’ expectations for international paid subscribers as shares soared over 10% in after-hours trading.

For the quarter the company reported earnings per share of $1.47 Analysts had been expecting $1.04 according to Refinitiv estimates. Revenue at $5.24 billion was slightly behind the $5.25 billion expected, per Refinitiv.

The company reported 517,000 domestic paid subscriber additions compared to 802,000 expected, per FactSet.
International paid subscriber additions however at 6.26 million beat the 6.05 million expected, according to FactSet estimates.

Looking ahead, for the fourth quarter, Netflix expects to report earnings of 51 cents per share on revenue of $5.4 billion. The company also expects 7.6 million global net adds for the fourth quarter, compared to 8.8 million in the same quarter one year earlier.

In its letter to shareholders, Netflix spoke about other streaming companies and wrote, “Many are focused on the ‘streaming wars,’ but we’ve been competing with streamers (Amazon, YouTube, Hulu) as well as linear TV for over a decade.”

It added, “The upcoming arrival of services like Disney+, Apple TV+, HBO Max, and Peacock is increased competition, but we are all small compared to linear TV. While the new competitors have some great titles (especially catalog titles), none have the variety, diversity and quality of new original programming that we are producing around the world.”

According to CEO Reed Hastings, it is linear TV providers that continue to represent Netflix’s biggest rival.

“We’re all relatively small compared to linear TV,” Hastings said. “So we’re not really competing with each other, but with broadcast.”

Disclaimer: We have no position in Netflix Inc. (NASDAQ: NFLX) and have not been compensated for this article.