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Netflix Stock Up 8% On Strong Subscriber Growth

Shares of Netflix Inc. (NFLX) surged over 8 percent on extended trading hours on Monday after the online-video streaming service reported a strong growth in subscriber additions both domestically and internationally driven by new original shows.

Netflix's earnings for the second-quarter fell shy of analyst estimates by a penny, however, revenues exceeded expectations on strong user growth.

Netflix added 5.20 million subscribers globally in the quarter, well ahead of its forecast of 3.20 million, to end the quarter with 103.95 million subscribers. The company added 1.07 million customers in the U.S., while international subscriber additions were 4.14 million, both above expectations.

Looking forward to the third quarter, Netflix expects to add 4.40 million memberships, with 0.75 million in the U.S. and 3.65 million internationally.

"Our streaming membership grew more than expected, from 99m to 104m, due to our amazing content. We also crossed the symbolic milestones of 100m members and more international than domestic members. It was a good quarter," the company said.

Netflix added several original content this quarter, with new seasons of "House of Cards" and "Orange is the New Black," as well as original shows including "Glow."

The video-streaming service provider is currently focusing on international expansion as it faces strong competition in the US. Currently, over half of its total members are now outside of the US.

However, Netflix's international expansion has come with higher expenses, as marketing costs increased to $274.3 million from $216.3 million, while technology and development expenses rose to $267.1 million from $207.3 million last year.

Los Gatos, California-based Netflix's second-quarter profit rose to $65.6 million or $0.15 per share from $40.8 million or $0.09 per share last year. On average, 35 analysts polled by Thomson Reuters expected earnings of $0.16 per share for the quarter.

Netflix's revenues for the quarter rose to $2.79 billion from $2.11 billion last year. Analysts had a consensus revenue estimate of $2.76 billion for the quarter.

For the third quarter, Netflix expects earnings of $0.32 per share, above $0.23 per share expected by analysts.

NFLX closed Monday's regular trading at $161.70, up $0.58 or 0.36%, on the Nasdaq. The stock further rose $14.20 or 8.73% in the after-hours trading.

by RTTNews Staff Writer

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