Netflix 4Q income grows sixfold as new members rush in

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In this Friday, Jan. 17, 2014 photo, a person displays Netflix on a tablet in North Andover, Mass. Netflix Inc. reports earnings after the U.S. stock market closes on Wednesday, Jan. 22, 2014.

In this Friday, Jan. 17, 2014 photo, a person displays Netflix on a tablet in North Andover, Mass. Netflix Inc. reports earnings after the U.S. stock market closes on Wednesday, Jan. 22, 2014.

Netflix said Wednesday its fourth-quarter net profit grew sixfold from a year ago as its subscriber base exceeded 44 million members worldwide.

The net profit of $48 million, or 79 cents per share, beat analysts’ estimates of 64 cents.

Shares of Netflix spiked sharply in after-hours trading, up 18% to $392.50.

With more customers connecting from mobile devices, Netflix padded its already growing customer base by expanding its slate of originally produced programs, including the second season ofLilyhammer and stand-up comedy specials featuring Aziz Ansari and Russell Peters.

The Los Gatos, Calif.-based company gained 2.3 million more U.S. subscribers.

Revenue for the quarter grew 24% year-over-year to $1.18 billion.

Since late last year, Netflix has been experimenting with new subscriber options, including one- and three-stream offerings and a lower-priced $6.99 plan for new customers to get a single stream of standard definition video.

“Eventually, we hope to be able to offer new members a selection of three simple options to fit everyone’s taste,” CEO Reed Hastings said.

Netflix expects momentum to continue into the current quarter, with another 2.25 million domestic customers to be added. That would exceed the prior year by about 11%.

Meanwhile, the total number of customers still using its DVD-by-mail service fell to 6.9 million from 8.2 million a year ago.

“Obviously, they did better than Wall Street expected and added more subscribers than most people were expecting,” said Frost & Sullivan principal analyst Dan Rayburn. “When does Netflix really peak out in the U.S.? Most people thought it would be a year ago, but it’s still adding subscribers.”

Courtesy of USA Today

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