Netflix Inc. (Nasdaq: NFLX) beat expectations with an earnings report Wednesday after the bell that sent its stock up more than 14% in after-hours trading, and set the stage for a stock rally in 2012.
The company reported U.S. subscribers in the fourth quarter jumped by 610,000 to reach 24.4 million. The increase helped recoup the 800,000 U.S. customers Netflix lost in the third quarter after it changed monthly rates.
The video rental and streaming company reported surprisingly good earnings for the fourth quarter. Net income was 73 cents a share, about 33% higher than The Street's estimate of 55 cents a share. Revenue rose 47% from a year ago to $876 million, compared to analysts' estimated $857.3 million.
By 1 p.m. Netflix shares today (Thursday) had soared 21% to just over $115.
Today's stock boost offers investors a much needed price spike as NFLX stabilizes its business from a tumultuous 2011. After the company announced a 60% price increase and a business segment spin off, frustrated subscribers attacked Chief Executive Officer Reed Hastings and cancelled subscriptions.
The stock took a toll - tumbling from a mid-year high of $305 to a yearly low of $62.37 by Nov. 30. The share price ended 2011 down 61%.