Netflix stock is up 14% after the streaming company reported strong third-quarter financial results that beat Wall Street forecasts.
For Q3, the company reported earnings per share (EPS) of $3.73 U.S., which was ahead of the consensus estimate among analysts of $3.49 U.S.
Revenue for the three months ended Sept. 30 amounted to $8.54 billion U.S., which matched forecasts.
However, Netflix announced a much better-than-expected increase in paid subscriptions during Q3, saying its added 8.8 million net new subscribers compared to an estimate of 6.1 million.
Netflix also forecast revenue of $8.7 billion U.S. for the current fourth quarter of 2023, compared with the consensus Wall Street view of $8.78 billion U.S.
The strong results come despite an ongoing strike by Hollywood actors that has virtually shutdown film and television production around the world.
Netflix said the positive quarter was due in large part to increased subscription fees and improving profitability.
The company said that it now expects a profit margin of 20% for all of 2023, which is at the high end of its previous guidance of 18% to 20%.
Netflix executives said that they expect even better profit margins in 2024, forecasting a range of 22% to 23% for next year.
On an earnings call with media and analysts, Netflix management said they are continuing to raise prices.
Later in October, Netflix said it will raise the monthly price of its premium subscription plan in America to $22.99 U.S. from $19.99 U.S., while its basic plan will rise to $11.99 U.S. from $9.99 U.S. currently.
Prices for the ad-supported and standard plans will remain the same, said the company.
Prior to today (Oct. 19), the stock of Netflix had risen 27% over the last 12 months to trade at $346.19 U.S. per share.
