Netflix beats expectations with revenue of $1.024B in Q1 2013 as it adds 3 million new subscribers

Netflix beats expectations with revenue of $1.024B in Q1 2013 as it adds 3 million new subscribers

Today Netflix reported its first quarter financial performance, with revenue of $1 billion and earnings per share of $0.05. Analysts had expected revenues of $1 billion, and earnings per share of $0.20.

The company noted in a letter to shareholders that the lower-than-expected profit of $3 million was due to a $16 million loss on “extinguishment of debt” connected to a bond refinancing in February. Excluding the loss, Netflix would have beat its guidance with $0.31 EPS.

Netflix reported that it added 2.03 million new US subscribers, ending the quarter with a total of 29 million. Internationally, 1.02 million users signed up for the service. The company now has 36 million subscribers.

In the quarter, domestic streaming brought in $639 million in revenue, international streaming $142 million, and its domestic DVD business $243 million. That domestic DVD revenue figure is down from $254 million in the company’s most recent quarter, which saw $945 million in revenue and $0.13 EPS.

Shares of Netflix jumped 6.73% to $174.37 on Monday. After-hours trading pushed the stock up an additional 19%.

Netflix’s original House of Cards series proved to be a boon for the company:

“The global viewing and high level of engagement with the show increased our confidence in our ability to pick shows Netflix members will embrace and to pick partners skilled at delivering a great series,” Netflix said.

Q2 should be another solid quarter for Netflix’s original series efforts. The new Hemlock Grove series had higher viewer numbers than House of Cards in its first weekend, and the fourth season of Arrested Development, which will be a Netflix exclusive, arrives on May 26.

Interestingly, the company noted that only 8,000 customers gamed the free trial offer to watch the whole season of House of Cards. Some investors had worried that Netflix’s decision to release all the episodes at once would have resulted in people taking advantage of the trial.

Netflix is guiding that its net income in the second quarter will be flat with the first quarter, excluding the $16 million loss from the bond refinancing. The company expects to see its domestic streaming customers to top 30 million in Q2.

Top Image Credit: Traci Lawson

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