Netflix (NFLX) Misses Earnings, Shares Spike Up

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Shares are up 12 percent after hours. Netflix closed at $475.46 and shot up to $542.18!

Key metrics from Netflix’ s earnings report

In the investor letter, Netflix said it passed 40 million U.S. subscribers and 20 million international subscribers during the first quarter. The company reported 4.88 million net streaming adds during the quarter, bringing its total subscribership to 57.39 million. Streaming revenue for the quarter was $1.4 billion.

In the U.S., Netflix added 2.28 million new members, and internationally, it added 2.6 million subscribers. In all, the company set a new record for member additions, hitting 4.9 million in the first quarter. That was significantly ahead of their guidance of 4.1 million and also beat last year’s 4 million net adds during the first quarter.

Netflix provides second quarter guidance

Netflix said it expects to add 0.6 million net new subscribers in the U.S. during the second quarter, which is about the same as what it added last year. Internationally, Netflix expects 1.9 million net adds during the second quarter, a 70% increase from last year. The company expects its international operating loss to widen to $101 million in the second quarter as it continues its international expansion.

Looking deeper into the performance data, NFLX has recorded an after-hours gain in 22 of the last quarters, adding to its gains the next day in 12 quarters (55% of the time). The stock has recorded an after-hours decline in 23 quarters, adding to its evening declines in next-day trade in 16 quarters (69% of the time).

Historical performance data for the past year:

On Jan. 20, 2015, NFLX gained 14.6% in night trade after beating Q4 earnings expectations and meeting on revenue. The stock firmed higher the next day, closing the Jan. 21 regular session up 17.3%.

On Oct. 15, 2014, NFLX cratered 25.7% in after-hours trade after topping Q3 Street estimates but also reporting weaker-than-expected subscriber growth. The stock narrowed its downside the following day, ending the Oct. 16 regular session down 19.3%.

On July 21, 2014, NFLX firmed 0.9% in night trade after topping Q2 expectations. The stock lost its upside the following day, closing the July 22 regular session down 4.6%.

On April 21, 2014, NFLX advanced 6.2% in after-hours trade after posting better-than-expected Q1 results and guidance. The stock firmed higher the next day, closing the April 22 regular session up 7%.

 

Netflix (NFLX)

 

STOCK SPLIT COMING

Netflix also took steps last week to issue a stock split for later this year, to be voted on at the company’s June 9 meeting. At what’s fast becoming an astronomical valuation — Netflix was trading at 160x earnings BEFORE the share price jumped after hours today. In any case, a 2-for-1 split would not even need approval from the board to pass, so expect that $500+ price tag will come down one way or another.

However you slice it, Netflix continues to perform as one of the top success stories of the decade to this point, with now 10 billion hours streamed in Q1 and share price gains now well over 50 percent, year over year.

 

 

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