Netfilx headquarters in Los Gatos, Calif.
Netflix’s second-quarter performance followed a familiar script of accelerating subscriber growth that has turned the Internet video service into a stock market sensation.
The company added 3.3 million worldwide subscribers during the three months ending to end the period with 65.6 million customers. About 900,000 of the additional subscribers were signed up in the U.S., where Netflix Inc. now has 42.3 million customers.
The subscriber gains overshadowed a 63 percent drop in Netflix’s second-quarter earnings as the company invested heavily in an international expansion aimed at making its Internet video service available throughout the world by the end of next year.
The subscriber increase announced Wednesday (yesterday, Macau time) was far higher than Netflix’s management projected and represented the biggest customer gains during the second quarter since the Los Gatos, California, company began streaming video over high-speed connections eight years ago.
By comparison, Netflix picked up 1.7 million subscribers in last year’s second quarter, traditionally a time when the company has more trouble attracting new subscribers and retaining existing customers because people tend to spend more time outside with the onset of spring.
The stellar numbers provided another lift to Netflix’s stock, which already has more than doubled this year. Netflix shares surged USD9.71, or 9.9 percent, to $107.84 in extended trading.
If that run-up holds when regular trading resumes today, it will represent a new peak for the stock. The rally comes just a week after Netflix executed a seven-for-one stock split in a move aimed at making its shares more affordable to a larger pool of investors.
The second-quarter sho-wing provided further evidence of Netflix’s increasing clout in the entertainment industry as a steadily expanding audience embraces the concept of watching video whenever they want on Internet-connected devices instead of being confined to cable- and satellite-TV programming set to come on at a specific time.
“We see Internet TV rising around the world just as the Internet is rising around the world,” Netflix CEO Reed Hastings said in a Wednesday interview. “It’s just the latest industry that the Internet is transforming.” Michael Liedtke, Technology Writer, San Francisco, AP
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