Did Netflix Live Up to Its Potential?
Netflix (NASDAQ:NFLX) investors were expecting good news from the company’s fourth-quarter earnings, and they got it. With 2.05 million new U.S. Internet subscribers added, the company beat expectations and shares jumped up 32 percent to $136.50 in after-hours trading.
Ahead of the report’s release, shares were already on the rise; just before 3 p.m. Eastern Standard Time, the stock was trading up close to 6 percent at $103.56. Since the company reported its third-quarter results at the end of October, the stock has gained more than 70 percent as investors have become more confident that new content deals will enable the streaming video provider to hold off Carl Icahn and the competition from Amazon (NASDAQ:AMZN).
The number of new subscribers that signed up for the service in the past three months was a closely examined figure, as it showed whether the high cost of Netflix’s licensing agreements with The Walt Disney Company (NYSE:DIS) and Time Warner (NYSE:TWX) benefited the company. JPMorgan Chase analyst Doug Anmuth had estimated that the company would add 1.58 million net new U.S. subscribers, bringing the year’s total to 26.7 million. But the company ended 2012 with more than 27.2 million U.S. online customers, Netflix said in its earnings report…