Netflix Shares Rise After Hours

Netflix (NASDAQ:NFLX) shares rose more than 14% in after-hours trading following the release of its third-quarter earnings, which beat earnings and revenue estimates, while subscriptions also beat expectations.

The broadcast giant reported earnings per share of $3.10, $0.92 better than the analyst estimate of $2.18, while revenue for the quarter came in at $7.93 billion compared to the consensus estimate of $7.85 billion, representing a year-over-year growth of 6%. However, the sequential decline in revenue was attributed to the impact of foreign exchange. Global streaming paid net additions amounted to 2.4 million versus expectations of 1 million. Revenue slightly exceeded the company's estimates during the quarter, with operating income and major successes in membership, TV and movies. Netflix said it launched some of the most-watched TV shows and movies of all time, including Monster: The Jeffrey Dahmer Story, Stranger Things S4, Extraordinary Attorney Woo, The Gray Man and Purple Hearts. After a challenging first half, we believe we are on a path to reaccelerate growth. Looking ahead, Netflix expects fourth-quarter earnings per share of $0.36 versus consensus of $1.12, while revenue for the period is expected to be $7.78 billion versus consensus of $7.97 billion. Netflix's revenue growth forecast is driven by the expectation of 4.5 million paid net additions, compared to 8.3 million in the fourth quarter of last year. "While we are very optimistic about our new advertising business, we do not expect a significant contribution in Q4'22 as we launched our Core with Ads plan during the quarter and expect to gradually increase our membership in this plan over time," Netflix said. The company also said that the strengthening of the US dollar will negatively impact its revenues and operating income by $1 billion and $0.8 billion, respectively, for the full year 2022. "In the medium term, we believe we can adjust our pricing and cost structure for a stronger US dollar world. Our long-term goal remains unchanged - to sustain double-digit revenue growth, grow operating profit even faster (as we expand margins), and deliver incremental positive free cash flow," said Mr. Gonzalez. Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!