Ahead of the Bell: Netflix up in premarket
Netflix shares soar on jump in subscriber additions, expectations of continued growth
NEW YORK (AP) -- A big jump in subscribers in the first quarter is lifting Netflix shares before Tuesday's opening bell.
The company said late Monday that it added 2 million U.S. subscribers, the top end of Netflix's target for the first quarter. That gives it about 29.2 million U.S. subscribers to its streaming service. It also picked up 1 million international customers, bringing it to 7.1 million streaming subscribers outside the U.S.
Netflix Inc.'s profit and revenue for the January-March period also surpassed analyst estimates.
In premarket trading, Netflix Inc. shares jumped 24 percent, to $216.17. Shares haven't risen above $200 in regular trading since September 2011.
Analysts were also pleased. Janney Capital Markets analyst Tony Wible boosted his target price on the stock by $60 to $250. He said recent content deals, such as its agreement with Walt Disney Co. to stream new movies, should further increase subscribers.
Cantor Fitzgerald's Youssef Squali also raised his target price, to $230 from $180.
Netflix shares peaked at nearly $305 in July 2011. Then the company outraged its U.S. subscribers with pricing changes, setting off a long slide. The stock bottomed at $52.81 last August, as investors also worried about the cost of international expansion and rising bills to license video.
The stock has recovered as Netflix steadily adds subscribers, along signs that its profit margins — how much profit it keeps after costs — are increasing.
