This article originally appeared as part of ongoing coverage in our premium Motley Fool Stock Advisor service ... we hope you enjoy this complimentary peek!
Shares of Netflix (NASDAQ:NFLX) jumped more than 17% early Wednesday after the online video streaming specialist posted better-than-expected fourth-quarter results.
Why it's happening
Netflix's quarterly revenue climbed 26% to $1.485 billion, helped by the addition of 13 million subscribers in 2014 to bring its total to 57.4 million. That translated to a 72% jump in net income to $83.4 million, or $1.39 per share. But note that includes a large one-time tax benefit, which means on an adjusted basis, earnings actually fell around 9% year-over-year to $0.72 per diluted share as Netflix continues to invest heavily in content and its international expansion. Even so, Wall Street was only expecting earnings of $0.45 per share on sales of $1.48 billion.
Better yet, Netflix management also stated their progress expanding internationally "has been so strong that we now believe we can complete our global expansion over the next two years, while staying profitable, which is earlier than we expected."
Put another way, that means Netflix will be able to expand from roughly 50 countries to 200 countries by the end of 2017. Given all that growth yet to come, it's not surprising that the market for so ferociously bidding up Netflix stock today.
Steve Symington has no position in any stocks mentioned. The Motley Fool recommends Netflix. The Motley Fool owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.