Netflix Inc. shares jumped 11% in after-hours trading after the company reported a surge in subscriber growth and stronger-than-expected profit.
The Los Gatos, Calif., company on Tuesday posted third-quarter earnings of $402.8 million, or 89 cents per share.
The results easily topped Wall Street expectations and marked a turnaround from the previous quarter’s results, which disappointed investors.
The average estimate of analysts surveyed by FactSet was for earnings of 68 cents per share.
The streaming giant also added about 7 million users in the quarter, well above the 5.12 million new subscribers projected by analysts, according to FactSet. And Netflix said it will add another 9.4 million subscribers during the current quarter, allaying investor fears from earlier in the year that it was facing a slowdown.
“Netflix's strong quarter will at least temporarily put to rest questions over the long-term viability of its business,” said EMarketer analyst Paul Verna.
Most of the subscriber growth was from international markets, which accounted for 80 million users. Overall Netflix has 137 million subscribers.
The internet video service posted revenue of $4 billion in the period, which also slightly beat Wall Street forecasts. Analysts expected $3.99 billion in revenue.
Netflix shares have increased 81% since the beginning of the year, while the Standard & Poor's 500 index has risen 5%.
On Tuesday, shares closed at $346.40, up 4%.
Known for such series as “Stranger Things,” “The Crown” and "Orange Is the New Black,” Netflix has been investing heavily in original programming to attract audiences and compete with a growing roster of streaming rivals, including Amazon, Hulu and Disney, which will launch its own streaming service next year.
A recent Times analysis found the number of new original releases from Netflix in the first seven months of 2018 was up nearly 88% from the same time last year.
New titles include “Disenchantment,” an animated series from “The Simpsons” creator Matt Groening, and “Maniac,” a futuristic miniseries starring Emma Stone and Jonah Hill.
David Wells, chief financial officer for Netflix, said in February that the service will have about 700 original TV shows worldwide by the end of the year.