SAN FRANCISCO – Netflix’s fourth-quarter earnings soared sixfold as the Internet video service added another 2.3 million U.S. subscribers to burnish its status as one of the world’s most popular entertainment outlets.
The financial results announced Wednesday topped analyst estimates, and Netflix basked in Wall Street’s adulation. The company’s stock surged $58.57, or more than 17 percent, to $392.30 in extended trading.
If the shares behave similarly in today’s regular session, the stock will hit its highest level since Netflix Inc. went public nearly 12 years ago.
Investors tend to focus more on Netflix’s subscriber growth because the widening audience provides the company with the means to negotiate the rights to show even more compelling content in the future.
“Internet video is catching hold,” Netflix CEO Reed Hastings said in a Wednesday interview with the Associated Press. “Consumers love that they can watch what they want when they want it.”
Netflix ended December with 33.4 million U.S. subscribers who stream video over high-speed Internet connections, up from 31.1 million in September. The company picked up another 1.74 million subscribers outside the U.S. to end last year with 10.9 million international customers.
Netflix expects to gain an additional 2.25 million U.S. subscribers during the first three months of this year.
As more people connect their TVs to the Internet and buy mobile devices, Netflix’s streaming service is emerging as a must-have pastime. Meanwhile, the DVD-by-mail service is gradually dying as more subscribers abandon watching video on physical discs. The company ended December with 6.9 million DVD subscribers, down from 13.9 million in September 2011.
Netflix earned $48 million, or 79 cents per share, during the final three months of last year. That compared to $8 million at the same time in 2012.