- Netflix’s earnings per share was $0.89 versus a consensus of $0.68.
- The streaming service company’s revenue was on target at $4 billion.
- Net new subscribers came in higher at 6.96 million versus the estimated 5.13 million.
Streaming service company Netflix (NFLX) reported third-quarter earnings per share of $0.89 compared with analyst estimates of $0.68 per share. Revenues in the third quarter were in line with estimates at $4 billion. The company reported adding 6.96 million subscribers during the quarter, far more than the 5.13 million estimated. Streaming revenue grew 36 percent over the same period last year, and the company’s recent subscriber increase and investments in original content are boding well for it in the second half of 2018.
The stock soared about 12 percent in after market trading on the news of the earnings beat.
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Netflix Is Bouncing Back From a Bad Q2
Netflix had a big earnings miss in the second quarter, which caused the stock to drop over $50 per share, from $400.48 to $346.95 in after-hours trading after that announcement. The company gained 5.15 million subscribers in the second quarter, significantly less than the 6.2 million that management had forecasted.
Netflix Bets Big on Its Original Content to Stay Ahead of Amazon
Netflix is betting on its original content, with plans to spend at least $8 billion this year to keep competition at bay. Amazon Prime Video and Hulu are other major streaming players, and more are on the horizon. The company also faces competition from AT&T’s new streaming service, which has already launched, and from Walt Disney, which has also announced plans to enter the fray.
Check Out the Competition: Here’s What AT&T’s New Streaming Service Will Give You That Netflix Can’t
9.4M New Netflix Subscribers Expected in Q4
Netflix estimates it will gain 9.4 million net new subscribers in the fourth quarter of 2018. The company has indicated it will reclassify some expenses in light of the increased amount of original content the company is now producing. The company increased its hours of original programming 135 percent over the same period last year.
Analysts Say ‘Buy’ NFLX
Netflix shares are up more than 80 percent so far in 2018, reflecting the growing number of consumers who subscribe to streaming services as they eschew cable television. Analysts continue to favor the stock, with 24 of 40 rating it a buy or a strong buy and 14 rating it a hold as of July. Only one analyst rated it an underperforming stock, and one recommended selling. The average analyst price target is $379.73.
Click to keep reading about Netflix producer Barack Obama.
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This article originally appeared on GOBankingRates.com: Netflix Stock Surges With $8 Billion Investment in New Shows