Netco stock rises after profits surge
Netflix stock surged more than 18% Tuesday on news that profits nearly doubled last quarter as the homevid pioneer holds its own — at least for now — against rivals like Blockbuster, movie downloads and video-on-demand.
Wall Streeters are still waiting to see the impact a new movie-download service from Amazon.com will have on Netflix’s biz.
Earnings rose to $12.8 million from $6.9 million. Revenue soared 48% to $256 million as the company saw its subscriber count climb 58% to 5.6 million at the end of the third quarter.
Company also raised its revenue forecast for the fourth quarter and full year, and shares popped 18.59% to close at $4.29.
Subscriber acquisition costs, a key metric, rose to $45.32 per new sub from $36.33 a year earlier. Churn — how many subs cancel the service — eased to 4.2% from 4.3%.
For $17.99 a month, consumers can rent three DVDs at a time as often as they wish from a library of more than 50,000 titles.