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Netflix Q4 Profit Beats Wall Street, Subscriber Growth Strong

Online-video streaming giant Netflix Inc. (NFLX), Tuesday reported a fourth-quarter profit that trounced Wall Street estimates, as revenues surged 31% driven by strong subscriber growth.

Netflix added 8.76 million subscribers globally in the quarter, above its forecast of 7.60 million, to end the quarter with 167.09 million subscribers. The company added 420,000 customers in the U.S. during the quarter, while it expected an addition of 600 thousand subscribers. International subscriber additions were 8.33 million, above its expectation of 7.00 million.

The company said subscriber additions were fueled by its broad slate of original programming and the worldwide adoption of streaming video.

Looking forward to the fourth quarter, Netflix expects to add 7.00 million memberships.

"We had a strong finish to 2019, with Q4 revenue growing 31% year over year, bringing full year 2019 revenue to over $20 billion, while FY19 operating income rose 62% to $2.6 billion. During the quarter, we surpassed 100 million paid memberships outside of the US. Streaming entertainment is a global phenomenon and we're working hard to build on our early progress," said the company.

Los Gatos, California-based Netflix's fourth-quarter profit rose to $587 million or $1.30 per share from $134 million or $0.30 per share last year. On average, 39 analysts polled by Thomson Reuters expected earnings of $0.53 per share for the quarter.

Netflix's revenues for the quarter rose 30.6% to $5.47 billion from $4.19 billion last year. Analysts had a consensus revenue estimate of $5.45 billion for the quarter.

The video-streaming service provider said average paid streaming memberships rose 21% and ARPU increased 9% year over year.

Looking forward to the first quarter, Netflix expects revenues of $5.73 billion and earnings of $1.66 per share. Analysts polled by Thomson Reuters currently expect earnings of $1.19 per share and revenues of $5.76 billion.

NFLX closed Tuesday's trading at $338.11, down $1.56 or 0.46%, on the Nasdaq. The stock, however, rose $1.14 or 0.34% in the after-hours trading.

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