Netflix reported a quarterly profit of $1.71 billion, or $3.75 a share, compared with $542.2 million, or $1.19 a share, for the year-earlier period. Revenue rose to $7.16 billion from $6.64 billion.
Netflix forecasted $1.36 billion in net income and $7.13 billion in revenue for the period.
Shares fell 11% in after-hours trading. The stock is up nearly 26% over the last 12 months.
Netflix’s subscriber base jumped by roughly 38 million during 2020 and has reached 204 million by the end of December in the video streaming market. Executives at the Los Gatos, California company have said the pandemic pulled forward demand because alternative entertainment options dried up.
“There’s a boost in engagement that you get when people are in a lockdown situation,” Netflix operations chief Gregory Peters said at an investor event last month.
Source Netflix and Dow Jones
Many consumers who get vaccinated are venturing out of their homes more and shifting spending despite the lingering threat posed by coronavirus. Airlines are looking for a resurgence in summer travel. Movie theaters and other venues have reopened in New York, Los Angeles and elsewhere. Restaurants and hotels, both hard hit by pandemic-related closures and restrictions, have stepped up hiring.
Netflix made a number of changes last year amid the surge in new subscribers. The company said in July that it promoted Ted Sarandos to co-chief executive, a position he holds along with Reed Hastings. In October, Netflix boosted the monthly price of its most popular streaming plan by $1 to $13.99 a month, and its premium offering by $2 to $17.99 a month.
Netflix increased the prices as other media companies have expanded their own streaming platforms. Newer services include Walt Disney Co.’s Disney+, Apple Inc.’s Apple TV+ and AT&T Inc.’s HBO Max. Discovery Inc. launched Discovery+ in the U.S. in January. ViacomCBS Inc. launched the Paramount+ service in the domestic market last month.
The company’s revenue grew 24% year over year and was in line with its beginning of quarter forecast, Netflix said. It also delivered a strong beat on earnings compared to Street estimates.
Netflix also approved a buyback program to repurchase up to $5 billion in common stock, beginning in 2021 with no fixed expiration date. That’s expected to begin the quarter, the company said.