Netflix, Inc. 3Q 17 Earnings Send Shares Higher After Hours

Netflix 3Q 17 earnings were released after closing bell tonight, and the company reported earnings of 29 cents per share on $2.985 billion in revenue. Analysts had been expecting earnings of 32 cents per share on $2.97 billion in revenue. In the year-ago quarter, Netflix posted 12 cents per share in earnings on $2.29 billion in revenue.

Netflix 3Q 17 Earnings

jgryntysz / Pixabay

Streaming revenue rose 33$ to $2.875 billion from $2.158 billion a year ago. Netflix’s streaming obligations rose to $17 billion from $14.4 billion in the year-ago quarter and $15.7 billion in the previous quarter.

The company added 5.3 million net new streaming subscribers during the third quarter, compared to the 3.6 million it added a year ago. Netflix added 104.02 million paid streaming memberships and 109.25 million total streaming memberships. In the U.S., net streaming subscriber adds amounted to 850,000, while international net streaming adds amounted to 4.45 million, versus 370,000 and 3.32 million, respectively, in the year-ago quarter.

Leading up to the Netflix 3Q 17 earnings release this afternoon, short interest in the company climbed as bearish bets increased. Data from financial analytics firm S3 Partners reveals that short interest in Netflix has climbed the most within the last week as short-sellers added $184 billion to their bets against the firm today alone and $316 million within the last week. The firm’s research head Ihor Dusaniwsky said ahead of the print that Netflix is the sixth most-shorted U.S. stock.

Before the Netflix 3Q 17 earnings report this afternoon, the company’s stock closed at a record high, so it seems the buy-side had just as much conviction as the sell-side. According to Dusaniwsky, Netflix short-sellers racked up more than $2 billion in mark-to-market losses so far this year, with their positions losing 49% year to date. He believes short-sellers are predicting that the company’s subscriber growth will weaken again due to the company’s subscription price increase.

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Moon Kil Woong 1 year ago Contributor's comment

It's rise is justified on solid growth. The price is high as always, but it is a better buy today than it was a month ago. #NFLX

Black Widow 1 year ago Member's comment

I always had the sense you thought #Netflix was a bubble that would eventually burst? $NFLX

Moon Kil Woong 1 year ago Contributor's comment

Many stocks are inflated, however, one must look at the current state as well as long term. Short term things are better with this report.

My main concern with it long term was its dependence on foreign growth which adds to cost. The other was and still is its cash flows. However, it is turning around its sales in the US and as many should have realized, cash flow alone doesn't tend to sink a stock unless things get dire. That is a longer term worry. Last there is long term worry about value because it assumes a lot. Tech itself is very richly valued, but its hard to say when it will moderate. For Netflix delivery is key and they should be commended.

Black Widow 1 year ago Member's comment

Well put.