A Q4 profit of $7.9 million exceeds Netflix’s expectations

Overall revenue increases to $3.61 billion in 2012.

Kevin Woodward

Netflix Inc. today reported a $7.9 million profit for the year, despite the online DVD rental company’s own predictions that an annual loss was possible.

For the fiscal year ended Dec. 31, Netflix, No. 9 in the Internet Retailer Top 500 guide, reported:

The report sent Netflix’s stock price up, reaching $103.26 late today, a 5.6% increase from Tuesday’s close of $97.81.

Netflix has been rebounding since it shelved plans in the fall of 2011 to split the company into two divisions, one for DVD rentals and the other for streaming content online. “We added more than 2 million members in Q4 to end the year with more than 27 million domestic members,” Netflix CEO Reed Hastings told shareholders in a letter. “Our holiday season was particularly strong, driven by consumers buying new electronic devices, including tablets and smart TVs.”

Netflix’s move to create original programming, including the Feb. 1 debut of “House of Cards,” the “Hemlock Grove” horror series and the fourth season of “Arrested Development,” are expected to increase the number of subscribers, Hastings says. These shows will be released on the same day across all of Netflix’s markets, he says. “Success with our originals will also enhance the global reputation of Netflix as a source of unique, must-view content,” he says.

For the fourth quarter Netflix reported:

For the first quarter of 2013, Netflix forecasts flat net income ranging to a profit of $14 million, and that its total subscriptions will span 28.5 million to 29.2 million.

Netflix is the single biggest retailer ranked in the books/music/video merchandise category in the 2012 Top 500 guide. In 2012, Netflix accounted for $3.20 billion—51.5%—of all merchandise category sales of $6.22 billion.


2012 results, Arrested Development, DVD rental, e-commerce, financials, Netflix, online streaming, quarterly earnings, Qwikster, Reed Hastings, Top 500, web only