Netflix Earnings Bolstered By Strong Subscriber Growth; Account Pirates Beware

Netflix Inc. (NASDAQ: NFLX) was on the earnings calendar docket for Monday and the streaming media giant reported earnings of $0.31 EPS and $1.02 billion in revenue. Thomson Reuters had its consensus estimates of $0.18 in earnings per share and for 17% sales growth to $1.02 billion as of earlier today.

We would point out the Netflix shareholder letter pointed out adding over 3 million streaming members in total (1.74 million US and 2 million gross, and 1.21 million international) to the streaming service to give it more than 36 million streaming subscribers. This was the first time ever where Netflix had $1 billion in quarterly revenues.

An analyst upgrade came this morning a boutique firm called B. Riley, where the analyst lifted the rating to Neutral from Sell. We showed that options traders were braced for a move of up to 9% in either direction ahead of earnings. The key moving averages were as follows: 20-day at $173.81; 50-day at $180.11; and 200-day at $105.89.

Reed Hastings is going to keep the push on for more exclusive content. The company said, “As we continue to focus on exclusive and curated content, our willingness to pay for non-exclusive, bulk content deals declines. At the end of May we’ll be allowing our broad Viacom Networks deal for Nickelodeon, BET, and MTV content to expire.”

Another bonus is that Netflix is going to start going after all of the account sharing with a 2-simultaneous-stream limit. Guidance for the quarter ahead was put at 29.4 to 30.05 million total members, with paid domestic members being 28.25 to 28.85 million. Adjusted earnings are being put in a range of $0.23 to $0.48 per share versus $0.29 expected from Thomson Reuters.   Netflix closed up 6.7% at $174.37 on the day ahead of earnings against a 52-week range of $52.81 to $197.62. Apparently the market really likes the subscriber growth numbers because this stock is up another 18% or so at $208 or so in the after hours trading session.

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