Netflix Inc. reported a significantly higher fourth-quarter profit on a tax-related gain and said it had surpassed its fiscal 2005 target of acquiring 4 million subscribers, news that sent shares up 7% in after-hours trading.
The Los Gatos, Calif.-based online DVD rental company posted net earnings of $38.1 million, or 57 cents a share, compared with $5.6 million, or 9 cents, a year earlier. Results from the quarter, which were better than expected, included a benefit of 45 cents a share related to the recognition of the company's deferred tax assets.
Revenue rose 36% to $195 million from $143.9 million a year earlier.
Netflix had reached 4.2 million subscribers by year's end, exceeding a goal that Chief Executive Reed Hastings set in September 2004.
Shares of Netflix, which finished $1.46 higher at $24.74, rose to $26.34 in after-hours trading.