Netflix Posts Surprisingly Good Quarterly Results
January 24, 2013 12:11 PM
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Netflix surprises Wall Street
Streaming video company Netflix recently posted its financial results for Q4 2012. Netflix had a very strong quarter adding nearly four million new customers in the United States and abroad. The company's results were better than expected on Wall Street, sending stock prices soaring (the stock is currently
up over 37 percent to $142
One reason analysts and Wall Street investors were so surprised by Netflix's quarterly results was because three months ago the company had issued a letter to shareholders warning that it expected to see a loss for the fourth quarter.
believes that Netflix underestimated the impact that incredibly robust sales of tablets, smartphones, and smart TVs would have over the holiday shopping season. The huge numbers of new devices meant a significant number of new signups for the streaming video service.
Netflix reported $8 million in net income for Q4 2012 or $.13 per share. Revenue rose 8% to a total of $945 million compared to the same quarter of the previous year.
The company also says that it expects to add 1.7 million new members during the first quarter of 2013. However, Netflix is predicting "relatively flat" net income for the quarter due to declining DVD profits and increased operating costs globally.
Analysts on Wall Street had expected Netflix report quarterly loss of $.13 per share. Full-year income for Netflix in 2012 was $17 million, a 92% decline from the previous year when Netflix reported $3.6 billion in full-year income. The massive decline is blamed on increasing costs (mainly the costs of purchasing movie/TV show streaming rights from studios).
its new AirPlay rival, DIALservice, in cooperation with YouTube.
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1/24/2013 4:14:56 PM
Profit margins for content distributors are razor thin. Its like this for other download/streaming services (Apple, Amazon, Microsoft, etc). The bulk of profits go to the publisher/developer/artist/etc.
Netflix has it even worse since they give access to everything they have rather than doing individual rental or purchase like those others do.
"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer
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