Netflix subscriptions boom around world, shares jump 20 percent
(This version of the October 17 story corrects reference to past quarters in second paragraph)
By Lisa Richwine and Rishika Sadam
(Reuters) - Netflix Inc added over 50 percent more subscribers than expected in the third quarter as original shows such as "Stranger Things" drew new international viewers and kept U.S. customers despite a price hike, sending its shares soaring 20 percent in late trade.
The company's performance represented a turnaround from the previous quarter of disappointing subscription growth. Netflix, which has spent heavily to expand outside its home market, also said that it was on track to start harvesting "material global profits" next year, even as it raised spending on original programming.
Shares of Netflix rose to $119.82 in extended trade from a close of $99.80.
Netflix added about 3.20 million subscribers internationally in the third quarter, higher than the 2.01 million average analyst estimate. (bit.ly/2e2gsRD)
In the United States, Netflix added 370,000 subscriptions, compared with analysts' estimate of 309,000, according to research firm FactSet StreetAccount.
"Investors appear laser focused on subscriber growth, and so long as Netflix delivers on that metric, investors will bid its shares up," said Wedbush Securities analyst Michael Pachter. However, Pachter said he thought the continuing cost of developing new shows would undermine plans to deliver material profits in 2017.
Netflix has expanded into more than 130 markets worldwide, including most major countries, except China. It said on Monday it was dropping plans to launch a service in China in the near term, opting instead to license its shows for "modest" revenue. Continued...