Netflix hits high, adds 1.7 million users

Netflix adds 1.7 million subscribers, an 11-year record, sending shares to a new high.

By TheStreet Staff Apr 22, 2010 12:50PM

Netflix DVD. Credit: (© Paul Sakuma/AP)By Jeanine Poggi, TheStreet

 

Netflix (NFLX) shares reached an all-time high on Thursday, a day after it said it added 1.7 million subscribers in its first quarter, its biggest gain in new users in its 11-year history.

 

The DVD-by-mail retailer had a stand-out first quarter, increasing earnings 44% to $32.3 million, or 59 cents a share, from $22.4 million, or 37 cents, a year earlier. Analysts were calling for earnings of 54 cents a share. Revenue jumped 25% to $493.7 million from $444.5 million.

 

Netflix ended the quarter with almost 14 million subscribers. The company predicted it would add 1.2 million to 1.5 million subscribers during the quarter.

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Another positive for Netflix: Hulu, the television streaming site, will reportedly begin charging its users for some of its content.

 

Despite the solid quarter, Netflix forecast second-quarter earnings that could fall short of Wall Street's forecast. The company expects a profit of 62 cents to 73 cents a share and revenue between $517 million and $525 million. Analysts predict earnings of 68 cents on revenue of $516.2 million.

 

There is also one word of caution: Netflix will eventually run out of households it can sign up when the installed base reaches 29 million, Needham analyst Charles Wolf wrote in a note.

 

Shares of Netflix climbed 16% to $100.87 as of 2 p.m., hitting a record of $102.49. The stock has soared 83%, outperforming the 24% advance of the S&P 400 Consumer Discretionary Index.

 

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