Netflix reported solid earnings and subscriber numbers for the September quarter, sending the stock sharply higher in after-hours trading.
For the third quarter, the company reported earnings of $3.73 a share, compared with the consensus estimate of $3.49 among Wall Street analysts tracked by FactSet. Revenue came in at $8.54 billion, in line with analysts’ expectations of $8.54 billion. Paid subscription net additions were 8.8 million versus the 6.1 million estimate.
Netflix also forecast revenue of $8.7 billion for the current quarter, compared with the consensus view of $8.78 billion.
“We’re optimistic about our prospects and the future of entertainment,” management said in a letter to investors.
Regarding the current work stoppage with SAG-AFTRA, Netflix said: “We’re committed to resolving the remaining issues as quickly as possible so everyone can return to work making movies and TV shows that audiences will love.”
Netflix shares were up 12% in late trading to $389.
The company’s profitability is also improving. Netflix expects an operating profit margin of 20% for 2023, which is at the high end of its prior guidance range of 18% to 20%. Management now predicts better operating margins next year, telling investors to expect a range of 22% to 23%.
There were changes in pricing. Effective Wednesday, the streaming company said, it is raising the U.S. monthly prics of its Premium plan to $22.99 from $19.99, while its Basic plan will go to $11.99 from $9.99. In July, Netflix removed the option for new customers to subscribe to the Basic plan. The company said the prices for its ad-supported and Standard plans will remain the same.
Netflix called out the success of “One Piece,” which was a live-action adaptation of a best-selling manga series. The show generated much conversation on social media and garnered 62 million views.
As of Wednesday’s close, Netflix shares had fallen 27% over the last three months on concerns about its profitability and growth prospects. The company’s latest numbers have put some of those worries to rest.
Write to Tae Kim at [email protected]
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