Netflix (NFLX) Smashes Q4 Views on Strong Contribution Profits, Ebbing DVD Sub Losses

January 23, 2013 5:03 PM EST
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Netflix (Nasdaq: NFLX) is exploding in late trading following strong fourth-quarter results issued after markets closed today.

Revenue for the media streaming giant rose 7.9 percent to $945 million, from $876 million the prior year. Adjusted net income was 13 cents per share, from 64 cents reported in the same period last year. Netflix earnings were 13 cents per share in the third-quarter as well.

Overall, the Street was more bearish on the company, seeing revs of just $934.1 million and a loss of 13 cents per share.

Netflix noted that the surprise profit beat internal views due to "contribution profit out-performance primarily in our domestic and international streaming segments."

Offering a pleasant surprise to investors was Netflix's DVD unit. From net sub losses of 2.76 million last year, that eased to a loss of just 380 thousand. Total DVD subs are at 8.22 million with 8.05 million as paying subs.

For Domestic Streaming, Netflix added 2.05 million for 27.15 million total subs. Paying subs rose 26.4 percent to 25.47 million.

International growth was also robust with Netflix tacking-on 1.81 million subs for a total of 6.12 million. Quarter-over-quarter, a more comparable measure in this instance, saw subs growth of about 32 percent.

Total streaming subs were 33.27 million, with 30.36 as paying subs. That compares with 28.11 million paying subs last quarter.

Netflix noted that Carl Icahn became a 10 percent investor last quarter at approximately $58 per share. The company noted, "We have no further news about his intentions, but have had constructive conversations with him about building a more valuable company."

Looking ahead, Netflix sees first-quarter 2013 Domestic Streaming subs of 28.5 million to 29.2 million, with 27.2 million to 27.9 million as paying customers. International Streaming subs should be about 6.6 million to 7.3 million with 5.8 million to 6.4 million as paying subs. DVD total subs of 7.6 million to 8.05 million with 7.45 million to 7.85 million as paying.

Q113 EPS is expected to be flat to 23 cents, versus the consensus of a 7 cent per share loss. Revs should be about $1.004 billion to $1.031 billion, above consensus views calling for revs of $969.4 million.

Shares of Netflix are up 30 percent in late trading.

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