Netflix adds more subscribers than thought

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Netflix, traditionally the first tech company to report its earnings each quarter, said revenue grew 34% in the quarter, in line with analyst estimates.

That helped lift profit more than threefold to 89 cents a share, beating the 68-cent average of analysts' estimates. The company added 6.96 million overall paid users, topping Wall Street's expectation of 5.15 million additions, and an internal projection of about five million.

Subscriber growth is paramount and in this category, Netflix didn't disappoint.

Netflix added 1.1 million subscribers in its domestic market, above the 674,000 additions forecast. Analysts were expecting 4.8 million - 600,000 in the USA and 4.2 million internationally, according to Nomura Instinet. Q4 is usually the most lucrative time for Netflix in terms of growth and revenue and there's no reason to see why this year will be any different.

Netlix shares surged more than 11 percent after the online TV service reported crowd-pleasing quarterly results after the market closed on Tuesday.

Netflix's stock was up $41.72, or 12%, to $388.12 a share in after-hours trading on Tuesday.

Netflix added 6.96 million new subscribers in Q3, well above the 5.3 million new subscribers it reeled in at this time a year ago and the roughly 5 million expected by analysts.

"It was a surprisingly good quarter that caught a lot of the financial community off guard", said Jim Nail, a senior analyst at Forrester Research.

Netflix said the investments were critical to the firm's growth. Sales jumped 34% to $4 billion and worldwide streaming revenues jumped 49% to $1.97 billion with revenues in the United States increased 25% to $1.94 billion.

Total streaming net change for fourth quarter: 9.4 million.

Executives said audiences welcomed shows tailored to specific markets, such as "Sacred Games" in India, which the company identified as key to its expansion.

In all, Netflix added nearly 2 million more subscribers than the 5.09 Wall Street expected.

"We expect solid 3Q18 results, led in part by Netflix adding a record number of Originals programming hours", Blackledge wrote.

Rivals have long groused that Netflix can spend ungodly sums without ever having to make money itself. The number of people paying for cable or satellite has fallen in recent years, denting profit at the world's largest media companies and triggering a wave of mergers.

Netflix plans to spend about US$8 billion on programming this year.

"More than 80 million accounts have watched one or more of the Summer of Love films globally and we are already in production for the next set of original rom-coms for our members", Hastings wrote. Disney and AT&T Inc., the parent of Warner Bros. and HBO, are each looking to introduce new services next year - after completing takeovers of other companies worth a combined $160 billion.

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