Netflix surges after upbeat results

Netflix stocks surged 27 percent in after-hours trade Wednesday after the Internet video service reported solid quarterly results which topped Wall Street estimates. The company said revenues jumped to $945 million in the fourth quarter as it added some two million new subscribers in the period. Profit for the quarter rose to $7.9 million from $7.7 million in the third quarter. Paul Ausick at 24/7 Wall Street said the report "blows the doors off" analyst estimates. Ausick said Netflix surprised analysts by forecasting results of breakeven or a profit in the current quarter, instead of a loss, and revenues topping $1 billion. The results "capped a tremendous year for Netflix as Internet TV becomes an ever-growing part of people's lives," chief executive Reed Hastings and financial officer David Wells said in a letter to shareholders. "We added nearly 10 million global streaming members in 2012, we grew to over 33 million global streaming members, we generated profits for the year 2012, despite large international investments establishing Netflix in 40 countries around the world." The letter provided upbeat guidance despite new competition in the Internet video segment. "When it comes to competition, we not only have a superior content offering due to our larger budget, but we are further along the experience curve when it comes to improving our user interface and delivering great quality streaming," the letter said. "For all of these reasons, Netflix continues to add members rapidly." Netflix is still losing money from its international operations but those losses are narrowing, the executives said. The company claims to be the world's leading Internet television network with more than 33 million members in 40 countries. Its share prices rose 27.4 percent to $131.64 in after-hours trade.