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Netflix Keeps Up Growth Spurt, Adding 4 Million Subscribers in Q1

Netflix slightly exceeded its international forecast for the first three months of the year, adding a net 4 million streaming customers around the world for the period.

For the first quarter of 2014, Netflix added 2.25 million streaming subs in the U.S., in line with its previous guidance, and 1.75 million internationally (vs. previous expectations of 1.6 million). It ended the period with 48.35 million total.

In announcing the Q1 results, Netflix also said it is looking to to increase rates for new subscribers in the current quarter by $1 to $2 per month, depending on the country, but that existing customers would remain grandfathered into existing pricing for a “generous” time period of one or two years.

In after-hours trading Monday, Netflix’s stock climbed as much as 7% to $372.05 per share, after closing up 0.8% for the day at $348.49.

SEE ALSO: Netflix to Raise Prices $1 to $2 per Month for New Subscribers

Netflix also said that in the second quarter of 2014, it will launch the first pay-TV integration of its service in the U.S. That’s after lining up deals with European providers including the U.K.’s Virgin Media to provide access to the unlimited streaming-video service through operator-supplied boxes.

With respect to original programming, Netflix said its strategy of investing in exclusive content continues to gain traction. The company cited the second season of “House of Cards” as attracting “a huge audience that would make any cable or broadcast network happy.” But the company still isn’t disclosing specific numbers.

Netflix beat Wall Street’s Q1 expectations for net income, posting 86 cents per share vs. analysts’ consensus expectations of 83 cents per share according to a Thomson Reuters survey. First-quarter revenue of $1.27 billion was in line with analyst expectations.

The company is forecasting lower net adds for the U.S. in the second quarter — historically its weakest period — but an uptick abroad. Netflix expects 520,000 net new streaming subscribers in the U.S. (vs. 630,000 a year earlier) and 940,000 overseas for Q2 2014 (vs. 610,000 a year earlier).

Netflix also went on record as opposing Comcast’s proposed $45 billion takeover of Time Warner Cable. The resulting cable operator will pass more than 60% of U.S. broadband households, and that would give it unprecedented control over the high-speed Internet market, according to Netflix.

“Comcast is already dominant enough to be able to capture unprecedented fees from transit providers and services such as Netflix,” Netflix CEO Reed Hastings and CFO David Wells wrote in their letter to shareholders. “The combined company would possess even more anticompetitive leverage to charge arbitrary interconnection tolls for access to their customers. For this reason, Netflix opposes this merger.”

In February, Netflix reached a deal with Comcast under which the streaming-video company is paying for direct connections to the cable giant’s Internet networks. Netflix had said the deal was not significant enough to affect its guidance on margins. But Hastings last month issued a call for a “strong” form of net neutrality that would prohibit broadband service providers like Comcast from “charging a toll” to deliver content.

In the second half of 2014, looking to accelerate international growth, Netflix plans to make a substantial expansion into Europe. The company is expected to launch in France this fall, with Germany reportedly on tap for September.

SEE ALSO: Netflix 2014 European Expansion: A Look Ahead

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