SAN FRANCISCO - As its U.S. subscriber growth tapers off, Netflix's (NFLX) Internet video service is setting out to conquer the rest of the world in an audacious expansion likely to sway the company's stock and the prices it pays for TV shows and movies.
The stakes riding on Netflix's next act came into sharper focus Tuesday with the release of the company's fourth-quarter report.
Netflix added 1.56 million U.S. subscribers from October through December, slightly below what management had predicted. It marked the second-straight quarter that Netflix's subscriber gains in the U.S. have disappointed.
But international growth exceeded the company's projections to give Netflix nearly 75 million subscribers through December.
Netflix's fourth-quarter earnings of $43.2 million also topped analyst forecasts. On a per-share basis, the Los Gatos, California-based company said it had net income of 10 cents. Adjusted for pretax gains, earnings per share came to 7 cents.
The results surpassed Wall Street expectations. The average estimate of 16 analysts surveyed by Zacks Investment Research was for earnings of 3 cents per share.
The Internet video service posted revenue of $1.82 billion in the period, falling just short of Street forecasts. Thirteen analysts surveyed by Zacks expected $1.83 billion.
But the overall growth in subscribers thrilled investors, and Netflix's stock surged 7 percent in extended trading to $115.50.