Netflix 4Q Exceeds Expectations with Improved Streaming, Subscriber Numbers

Netflix Inc. (NASDAQ:NFLX) reported its fourth quarter earnings after the bell on Wednesday and exceeded analysts’ profits estimates with improvements in its streaming business. Also helping fourth quarter numbers was the addition of 610,000 U.S. customers, enabling the company to hit 24.4 million subscribers and improve its streaming margins to 10.9 percent.

The company recovered from a third quarter full of customer dissatisfaction. It lost 800,000 domestic users during that time, according to Bloomberg. Customers left in droves over Netflix’s pricing changes and its now defunct plans for an independent DVD business.

CEO Reed Hastings said after the earnings’ release, “We’re really excited and pleased in our recovery. We’ve got a long way to go and a huge opportunity ahead.”

Other positives from the company’s fourth quarter earnings report included the addition of customers signing up for streaming service instead of DVD mail order plans during the holiday season. In the fourth quarter, U.S. online subscribers rose to 21.7 million as DVD customers dropped to 11.2 million; these numbers include subscribers who receive both services.

First Quarter Estimates

Looking ahead to the first quarter, the company forecasts a loss from $9 million to $27 million, or $0.16 to $0.49 per share, according to Bloomberg; sales are estimated at $842 million to $877 million.

Domestic online users could reach between 22.8 million to 23.6 million while DVD users may decline to 9.4 million. Analysts estimate a $0.29 loss on $845.6 million in revenues.