Netflix Jumps Postmarket as Margins, International Subs Cheer Wary Investors

Investing.com – Netflix (NASDAQ:) shares rallied after hours as investors breathed a sigh of relief that its quarterly numbers weren’t as dire as many in the market predicted.

The company issued guidance that fell short of expectations after the bell, but said margin growth would be sustained, allaying worries that rising competition would force the streaming giant to slash prices.

The company is projecting it will add 7.6 million net subscribers during the fourth quarter, below the 9.5 million net ads expected by analysts, but still showing growth from the most recent period.

Total paid net adds of 6.8 million increased 12% year over year and was an all-time third-quarter record, with International paid net additions rising 23% year on year to 6.3 million in the quarter, above estimates of 6.2 million. In the U.S., paid net adds rose by 500,000 in the quarter, below estimates of 800,000.

The stock rose 8% in after-hours trading.

Netflix of $1.47 a share, beating estimates from Investing.com for earnings of $1.03 per share, while revenue of $5.25 billion was in line with estimates.

Faced with the threat of nearing peak subscriber growth in the U.S., the streaming giant has been stepping up efforts to scoop up more international subscribers.

Despite weaker-than-expected guidance on subscriber growth and an expected ramp-up in competition, Netflix continued to tout margin expansion, allaying fears that it would be forced to consider price cuts, with rivals Apple (NASDAQ:) and Disney (NYSE:) set to launch less-expensive streaming services next month.

“We’re on track to achieve our full year 2019 operating margin goal of 13%. In 2020, we’ll be targeting another 300 basis points in operating margin expansion, consistent with the annual margin improvement we’ve delivered each year since 2017,” the company said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.