After a year of questions about the future of cable and streaming, it seems that Netflix (NFLX -0.49%) announced to the world this week that it's the clear leader in streaming. Third-quarter results easily passed expectations, and according to data provided by S&P Global Market Intelligence, shares popped as much as 15.5% in trading this week. At noon ET on Friday, shares are up 13.4% for the week and leading the tech industry by a wide margin.
Netflix shows its streaming power
Results were impressive by almost any measure. Revenue was $8.54 billion, up 7.8% from a year ago, and net income was $1.7 billion, or $3.73 per share. But what really shocked investors was the addition of 8.76 million subscribers in the quarter. Netflix is back on a growth trend, and that's been helped by ad-supported tiers that could open up a huge new revenue opportunity.
The stock reacted because of how much Netflix beat expectations. Wall Street expected revenue of $8.54 billion, earnings of $3.49 per share, and subscriber additions of just 5.49 million. So results beat expectations across the board.
Can Netflix keep the cash flow coming?
Management expects free cash flow to be about $6.5 billion after $1.9 billion in free cash flow in the third quarter. And the buyback authorization was increased to $10 billion after the company bought back $2.5 billion in shares last quarter.
Netflix seems to be hitting on all cylinders as other media companies struggle. We know cable is dying and other streamers are losing money, so Netflix continues to solidify its lead in the streaming future.
