Late on Tuesday, the internet television network Netflix (NFLX) exceeded Wall Street’s expectations for revenue and new members during the fourth quarter. However, it gave conflicting guidance and had low earnings. Netflix’s stock did, however, rise during prolonged trade.
In the fourth quarter, the leader in streaming video added 13.12 million new users, substantially above analyst expectations of 8.69 million. By the end of 2023, there were 260.28 million users globally.
The Los Gatos, California-based business made $2.11 per share during the December quarter on $8.83 billion in sales. On sales of $8.72 billion, analysts surveyed by FactSet predicted earnings per share of $2.22. With $7.85 billion in sales, Netflix only made 12 cents per share in the previous year.
Netflix projected $4.49 per share in earnings on $9.24 billion in sales for the current quarter. Analysts had projected first-quarter earnings of $4.10 per share on $9.27 billion in revenue. With $8.16 billion in sales, Netflix made $2.88 per share in the previous year.
In today’s stock market after-hours trade, Netflix’s shares increased 8.4% to 533.50. Tuesday’s regular session saw a 1.3% increase in Netflix stock, which ended the day at 492.19.
Netflix’s stock was trading in the 5% buy zone following its breakout last month prior to the release of the report. IBD MarketSmith data show that on December 18, Netflix stock broke out of a 22-week consolidation pattern at a purchase mark of 485.
Netflix has twice exited the purchase zone in the last month, but it has managed to stay above the stop-loss sell zone. The 50-day moving average line has provided support for Netflix shares, which is a bullish indication.
“As streaming grows, we think there’s a lot more room for growth,” Netflix management stated in a letter to shareholders.
The company intends to expand its offering with “games, live, and sports-adjacent programming” in 2024, while simultaneously enhancing its core business of TV shows and movies.
Moreover, Netflix set out to grow its advertising business. Additionally, it hopes to strengthen its bond with supporters by utilizing “marketing, consumer products, and innovative new live experiences.”
