The stock price of Netflix (NASDAQ:NFLX) skyrocketed to an all-time high after reporting strong third quarter financial results after hours on Monday. The shares of the online video streaming company went up more than 10% to $392.86 per share as of this writing
During the third quarter, Netflix generated a net income of $32 million or $0.52 earnings per share compared with its $7.7 million net income of $0.13 earnings per share in the same period a year earlier. In terms of revenue, the company achieved a 22% increase to $1.1 billion. Netflix beat the consensus earnings estimate of analysts at $0.48 per share based on data compiled by FactSet.
Netflix reported that the number of its subscribers in the United States increased by 1.3 million to 31 million during the period. The company exceeded the 29 million subscribers of HBO, the cable and satellite television network of Time Warner (NYSE:TWX) in the country. The online video streaming company said its international subscribers by 1.44 million to 9.2 million compared with HBO’s 114 million subscribers globally.
For the fourth quarter, Netflix projected that it would be able to add 2 million domestic subscribers and 1.31 million international subscribers. The online video streaming company expected its domestic contribution margin to improve by 400 basis points to 23% year-over-year. The company said its $7.99 subscription is working well for both membership and contribution margin growth.
The online video streaming company recorded $74 million international contribution losses as the company experienced flat to slight improvements in contribution profits in all markets, but Netflix anticipated improvement in contribution losses to $65 million next quarter.
The company emphasized the success of its original content particularly the House of Cards that won Emmy Awards. The shows’ David Fincher won the best director for drama series. The House of Cards was the first series not aired on television or cable channel that won a major category in the history of the Emmy Awards. Netflix also said that the Orange is the New Black has been a tremendous success as it is expected to end the year as the most watched original series.
Netflix is expected to produce the most compelling and remarkable contents over the new few years. “Coupled with the flexibility of our Internet viewing and power of our personal recommendations we will keep changing television for the better,” according to the company. The company plans to double its investments in original content in 2014.
The company said it will release the second season of House of Cards, Orange is the New Black, Derek and Hemlock Grove, and new animated series next year. It will also launch the projects created by Todd and Glenn Kessler and Daniel Zelman.