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Netflix stock soars on subscriber growth led by 'House of Cards'

April 22, 2013|By Dawn C. Chmielewski
  • Netflix Chief Executive Reed Hastings is shown at a 2011 event in South Korea.
Netflix Chief Executive Reed Hastings is shown at a 2011 event in South Korea. (SeongJoon Cho / Bloomberg )

Netflix’s stock shot up 24% in after-hours trading Monday after the Internet film and TV delivery service said it had added 3 million new members, bringing its total number of global subscribers to more than 36 million.

The high-profile original series, "House of Cards," which debuted Feb. 1, generated a halo effect for Netflix, producing enormous media and social-media buzz.

Some investors worried that fans of actor Kevin Spacey or of the show's executive producer, David Fincher, who directed "The Social Network," would take advantage of a free trial offer from Netflix to watch the political thriller -- and then cancel.

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But Netflix said there was little of this sort of gaming, with fewer than 8,000 people canceling out of the millions of free trials in the quarter.

After the company released the subscriber news as part of its quarterly earnings announcement, its share price jumped about $42, or 24%, to about $216 in after-hours trading. That surge came after the stock climbed 11% in regular trading to $174.37.

Netflix's latest home-grown series, "Hemlock Grove," a horror/science-fiction thriller that launched April 19, was viewed by more members globally in its first weekend than "House of Cards," the company said.

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The fourth season of the cult favorite "Arrested Development," becomes available May 26. It will be followed this summer by "Orange Is the New Black," a prison dramedy from "Weeds" creator Jenji Kohan, and "Derek," a humorous look at life in a senior center, from comedian Ricky Gervais.

"Long term, we believe the value of our original series in driving acquisition and retention improvements will be borne out as we add more seasons of already popular shows like 'House of Cards' and further series," wrote Netflix Chief Executive Reed Hastings, in a letter to shareholders. " 'Harry Potter' was not a phenomenon in book one, compared to later books in the series."

Netflix reported revenue of more than $1 billion for the first quarter, ended March 31. That was up 18% from a year earlier. The company reported profit of $2.7 million, or 5 cents a share, compared with a loss of $4.6 million, or 8 cents a share, in 2012.

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