Netflix shares rise 11% on strong subscriber growth, considers share buybacks

(L-R) Reed Hastings and Ted Sarandos attend the “Marseille” Netflix TV Serie World Premiere At Palais Du Pharo In Marseille, on Could 4, 2016 in Marseille, France.

Stephane Cardinale | Corbis | Getty Photos

Netflix reported earnings for the fourth quarter of 2020 after the bell on Tuesday, saying it’s “very shut” to being free money circulation constructive and is considering stock buybacks. This yr, it expects to be round break even on money circulation. 

The inventory was up about 11% after hours.

Listed here are the important thing numbers:

  • Earnings per share (EPS): $1.19 vs $1.39 anticipated, in accordance with Refinitiv survey of analysts
  • Income: $6.64 billion vs $6.626 billion anticipated, in accordance with Refinitiv
  • International paid internet subscriber additions: 8.5 million vs 6.47 million anticipated, in accordance with StreetAccount

Netflix handily beat estimates for world paid internet subscriber additions, reporting 8.5 million versus the 6.47 million analysts anticipated, in accordance with StreetAccount. Netflix additionally beat estimates for income however fell quick on earnings per share.

Netflix’s expectation of quickly turning into free money circulation constructive would convey to life the bull case for the inventory. Netflix stated it could now not want exterior financing and would even discover returning money to shareholders. 

Netflix hasn’t made such a transfer since 2011, a pivotal yr within the firm’s shift from DVDs to streaming. 

The corporate stated it intends to pay down extra of its debt as effectively. It is raised $15 billion in debt since 2011 and presently has $8.2 billion money readily available. 

Netflix has been free money circulation constructive for the previous three quarters, although executives largely credited that as an impact of postponed manufacturing through the pandemic. Free money circulation for This autumn was damaging as predicted resulting from manufacturing restarts in some areas, however not as vital as anticipated. Free money circulation for full yr 2020 was +$1.9 billion versus -$3.Three billion in 2019.

-CNBC’s Alex Sherman contributed to this report. 

This story is creating. Test again for updates.

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