Netflix Shares Surge Nearly 5% After Closing Bell Despite Earnings Miss

Netflix shares shot higher shortly after the company reported it added millions more subscribers in the fourth quarter than Wall Street expected. The surge in share prices is taking place despite a big earnings miss.

After Thursday’s closing bell, Netflix Inc is trading $330.95, up $15.31 or +4.85%. During the previous session, it finished at $315.64, down $10.69 or -3.28%.

Here are the highlights from the report:

Earnings per Share (EPS) came in at 12 cents, well under the 45 cents per share estimate from Refinitiv.

Revenue was steady at $7.85 billion, according to Refinitiv’s survey.

Global Paid Net Subscribers showed an increase of 7.66 million, compared to the estimate of 4.57 million adds, according to StreetAccount estimates.

Going forward, Netflix will no longer give subscriber guidance, although it will still report those numbers in future earnings reports. The rationale is that the company is growing its focus on revenue as its primary top line metric instead of membership growth.

Breaking News:  Netflix Founder Reed Hastings Gives Up CEO Role

In breaking news released after the highly anticipated Netflix earnings report, the company announced Reed Hastings is giving up his CEO role but will remain on as chairman,

According to the company announcement, Co-CEO Ted Sarandos will remain in his position. Greg Peters, most recently Chief Operating Officer, will assume the post of co-CEO in Hastings’ place. Peters will also join the company’s board.

“I want to thank Reed for his visionary leadership, mentorship and friendship over the last 20 years. We’ve all learned so much from his intellectual rigor, honesty and willingness to take big bets – and we look forward to working with him for many years to come,” said Sarandos in a written statement.