Rental company has 14 million subscribers
NEW YORK (AP) — After another quarter of winning over more subscribers to its movie rental service, Netflix Inc. is also winning more investors.Its stock surged $14.48, or 16.7 percent, to $101.46 in afternoon trading Thursday after hitting an all-time high of $102.49 earlier in the day. The jump came after another blowout quarter for Netflix and despite jitters from some analysts who think the stock is due for a return to earth. “Despite solid execution and momentum, we believe that Netflix will be challenged to grow at its current pace,” Wedbush analyst Michael Pachter told clients in a note Thursday. He kept an “Underperform” rating on the stock. Tony Wible, of Janney Capital Markets, also sounded a cautious note, reiterating his “Sell” rating on shares. He pointed out competition from RedBox, the $1-per-night kiosk rental company, and the potential for rising costs as film studios that supply Netflix with movies look for ways to offset declining DVD sales. Still, Netflix announced after the close of trading Wednesday that it added 1.7 million customers in the first three months of the year. It ended March with almost 14 million subscribers and expects to add another 700,000 to 1 million by July. The company’s growing popularity helped it earn 59 cents per share, topping analysts’ average forecast of 54 cents per share, according to Thomson Reuters. Revenue matched estimates at $494 million, up 25 percent from the same quarter a year ago.