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Netflix surges on subscriber growth, leadership changes

by SuperiorInvest

Netflix (NFLX) shares are rising extended trading after the largest streaming service provider reported added far more subscribers in the fourth quarter than expected.

Netflix said global net streaming additions were 7.66 million, up from its earlier estimate of 4.5 million and also well ahead of analysts’ estimates. Netflix attributed the increase to both strong acquisitions and retention, driven primarily by the success of the company’s programming lineup in the period.

Netflix saw fourth-quarter revenue rise 1.9% to $7.85 billion, in line with forecasts. She attributed this to a 4% jump in average paid memberships. However, earnings per share (EPS) of $0.12 was much lower than expected. The company expects current quarter EPS of $2.82 on revenue up 3.9% to $8.17 billion.

Change at the top

Netflix also announced that co-founder and CEO Reed Hastings is stepping down. Hastings will remain executive chairman. Co-CEO Ted Sarandos will join current COO Greg Peters as co-CEO. Hastings explained va blog post that the board has been discussing succession planning for many years and both he and the board agreed that “the time is right” to make a change.

Netflix shares fell in the regular session but jumped 6% in after-hours trading.

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