Netflix (NFLX) surged late Monday after the streaming video service reported huge Q3 earnings growth as its original programming continues to attract new subscribers. It also provided a bullish forecast.
Netflix earned 52 cents a share, up 300% from a year earlier, and 3 cents better than Wall Street expected. Sales rose 22% to nearly $1.11 billion, topping analyst views for $1.10 billion.
For the current quarter, Netflix expects to earn 47-73 cents a share. At the 60-cent midpoint, that would be a 362% jump from a year earlier. Analysts polled by Thomson Reuters were modeling for Netflix to earn 46 cents on sales of $1.15 billion.
Netflix added 1.29 million net U.S. streaming subscribers in Q3 for a total of 31.1 million. It attracted 1.44 million new international streaming users, bringing that total to 9.2 million.
For Q4, Netflix expects to add 2 million domestic streaming subscribers and 1.3 million overseas.
Netflix rose 10% after hours Monday to new high territory. In the regular session, shares rose 6% to 354.99.
Hastings raised a caution flag about Netflix's stock appreciation, saying solid results this year were "compounded by momentum-investor-fueled euphoria.
"Every time I read a story about Netflix being the highest appreciating stock on the S&P 500, it worries me because that was the exact headline that we used to see in 2003," he said on a conference call with analysts. "We have a sense of momentum investors driving the stock price, more than we might normally. There's not a lot we can do about it, but I wanted to honestly reflect upon that.
Netflix said domestic customer adds were 11% higher than in Q3 2012 "due to the growing strength of our content offering, aided by the great press coverage and social buzz generated by 'Orange Is the New Black' and our Emmy nominations for 'House of Cards.'
Hastings and CFO David Wells said in a letter to shareholders that original shows get most of the headlines, but a bigger share of viewing "is generated by our exclusive complete season-after series." In Q3, Netflix added new seasons of such popular shows as "The New Girl," "The Walking Dead," "Scandal" and "Breaking Bad." Netflix also has bucked up its children's programming by adding shows like "Goosebumps" and "The Magic School Bus.
Netflix's strong international subscriber growth was driven by expansion into the Nordic countries and Netherlands. The Los Gatos, Calif.-based company said it plans to enter new countries next year, but did not specify.
Netflix vies with Amazon (AMZN), Hulu Plus, Time Warner's (TWX) HBO Go and other all-you-can-eat subscription services.