Ahead of the Bell: Netflix

Written By Unknown on Selasa, 22 Oktober 2013 | 20.25

NEW YORK — Netflix shares soared 9 percent before Tuesday's opening bell after it added 1.3 million U.S. subscribers during its most recent quarter.

The online movie service has been notching new all-time highs since early August and is on pace to do that again Tuesday, if premarket gains hold.

Netflix has altered the media landscape and is reportedly in talks with cable operators to expand access to more viewers, even as more households "cut the cord," and dump cable television all together.

The $8-per-month membership fee is tailor-made for uncertain economic times and the company has been aggressive in expanding what it offers to customers, including original programming like "House of Cards," a political thriller starring Kevin Spacey, Kate Mara and robin Wright.

It seems the only thing dividing industry watchers about prospects for the company is the meteoric rise of its share price.

The stock has more than quadrupled this year as original programming and expanded service draws new adherents. The stock price in August surpassed heights reached two years ago, before a poorly handled change in service sent shares plunging to a 20-month low.

Tony Wible of Janney Capital Markets backed his "Buy" rating, pointing to the steady growth of subscribers.

But Jefferies analyst Brian Fitzgerald stuck by his "Underperform" rating, saying that it's tough to justify the company's current stock price given that its content costs are rising.

The company's profit of 52 cents per share beat Wall Street predictions of 48 cents, while revenue rose 22 percent to match predictions of $1.1 billion. Netflix also said it expects to add another 2.5 million to 4.1 million subscribers worldwide in the current quarter ending in December.

In premarket trading, Netflix shares jumped $31.31 to $386.30.


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