Investors seemed happy with news that Netflix added 2 million additional subscribers in the U.S. for Q4 2012, pushing the company’s stock up a whopping 28.5 percent to $132.72 in after hours trading.
Subscriber growth is one of the big things investors are looking to judge how much of a risk Netflix is taking. Not only is Netflix spending boatloads of money on the recent content deals with Disney and Warner Bros. content deals, its also spending money to produce a slate of original programming and grow in international markets. And since Netflix is using money from its domestic subscription business, U.S. growth is pretty important.
Additionally, Netflix is estimating subscriber growth of Netflix forecasts 28.5-29.2 million domestic streaming subscribers in Q1 2013.
Netflix investors weren’t pleased with the company’s Q4 predictions back in October, punishing its stock over high operating costs and lower than expected subscriber growth. Netflix estimated its domestic subscribers would hit 26.4 million to 27.1 million (up from 25.1 million in Q3), and international subscribers between 5.2 million and 5.9 million (up from 4.31 million last quarter). As for net income, Netflix estimated between a $13 million loss and $2 million profit.
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