Netflix Beats Expectations, Shares Jump Over 10%
Netflix (NASDAQ: NFLX) reported impressive third-quarter results, surpassing profit expectations and experiencing a surge in subscriber numbers. As a result, the streaming giant’s shares jumped more than 10% in after-hours trading.
Earnings per share for the quarter reached $3.73, with revenue totaling $8.54 billion. Analysts had projected EPS of $3.49 and revenue of $8.54 billion. Netflix’s performance exceeded its own guidance.
The company witnessed a significant increase in paid subscribers, adding 8.76 million in the third quarter, surpassing expectations of just over 6 million.
In a shareholder letter, Netflix acknowledged the challenges faced by the industry over the past six months due to the writers and actors strikes in the US. While the writers’ strike has concluded, negotiations with actors’ unions are ongoing. The company expressed its commitment to resolving these issues swiftly to enable the resumption of movie and TV show production.
Looking ahead to the fourth quarter, Netflix projects earnings per share of $2.15 and revenue of approximately $8.69 billion. The company expects a revenue growth rate of around 10.7%, following a 7.8% increase in the third quarter.
Netflix’s operating margin for the third quarter was 22.4%, slightly higher than its guidance. Furthermore, it anticipates an operating margin of 20% in 2023, nearing the top end of its range.
