Netflix Shares Reverse on Tuesday
Shares of Netflix, Inc. (NASDAQ:NFLX) , the famous video streaming service provider, traded sharply to the downside on Tuesday following the company’s third quarter results on Monday. In the report following the market close on Monday, the company reported its net income rose by more than 300 percent while its membership base grew by 40 million worldwide. The company’s net income rose 315% to $31.8 million for the quarter that ended Sept. 30. Earnings per share of 52 cents beat analysts’ average estimate of 49 cents on the bottom line. On the top line the company was able to grow drastically, revenue rose 22% to $1.1 billion.
Including customers who canceled its service, Netflix added 1.3 million new U.S. customers during the quarter, an 11% jump from a year ago, bringing the domestic membership total to 31 million. During the quarter, Netflix released the just-ended seasons of some popular TV shows, including The New Girl, The Walking Dead, Scandal, Breaking Bad, Revolution and Pretty Little Liars. Netflix, Chief Executive Officer, Reed Hastings commented by saying:
“While our original series get most of the headlines, a bigger percentage of overall Netflix viewing is generated by our exclusive complete season-after series,”
Shares jumped almost 10% in after-hours trading. Netflix rose $21.49, or 6.4%, to close regular trading at $354.99. However, these gains were quickly lost when the market opened for full trading on Tuesday. While the cause of the sharp change in direction is hard to say. Analysts and traders are no doubt watching closely. Over the next week it seems likely a number of analysts will comment on the report and hopefully offer guidance to the declines. At the time of this writing, shares of the company were down by 6.6 percent to $331 per share.
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