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Netflix Inc.’s share price up, doubles its earnings in Q2, projects rising costs in next quarter

Netflix Inc. made a statement yesterday, revealing that its customer gains over the second financial quarter surpassed its own projection by reaching more than 50 million users globally. The company also announced that its earnings over the second three months of the fiscal year more than doubled, as it added 1.7 million subscribers worldwide. However, Netflix Inc. warned that its profits over the third quarter may be affected as the company decided to follow a more aggressive international expansion.

According to the companys statement, the net income of Netfliz Inc. increased from 29 million dollars, or 49 cents per share over the same period a year earlier, to 71 million dollars, or 1.15 dollars per share over the second quarter of the current year. Still, the company projected that its earnings in the third quarter would be hurt by increased costs in Europe. The company also said that it expects its “contribution loss” from international streaming to rise from 15 million in the second three months to 42 million dollars over the next quarter.

In a letter to shareholders, cited by the Wall Street Journal, Netflix said its “broad success” abroad “has convinced us to further invest aggressively in global expansion.”

The U.S.-based company also shared that it managed to add 570 000 customers in its home market over the second financial quarter, which boosted its subscribers to more than 50 million globally.

One of the analysts, who work at Hudson Square Research – Mr. Daniel Ernst commented on the companys performance over the second three months for Bloomberg: “These are good numbers. But more importantly, it sets them up for future growth. It sets them up for the next 50 million as they go global.”

Netflix Inc. was 1.75% up to close at 451.95 dollars per share yesterday, marking a one-year change of +70.82%. According to the information published on CNN Money, the 32 analysts offering 12-month price forecasts for Netflix Inc. have a median target of 429.50, with a high estimate of 590.00 and a low estimate of 215.00. The median estimate represents a -4.97% decrease from the last price of 451.95.

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