Netflix shares explode as revenue tops $1 billion

Streaming service adds more than 3 million streaming subscribers around the world in the aftermath of the debut of its "House of Cards" miniseries.

Charles Cooper Former Executive Editor / News
Charles Cooper was an executive editor at CNET News. He has covered technology and business for more than 25 years, working at CBSNews.com, the Associated Press, Computer & Software News, Computer Shopper, PC Week, and ZDNet.
Charles Cooper
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Actor Kevin Spacey attends Netflix's "House Of Cards" New York Premiere at Alice Tully Hall on January 30, 2013 in New York. Getty Images
Bulls and bears will continue to argue about the fair price of its stock, but Netflix's surprisingly good first-quarter earnings report should put paid to the contention that this company's fundamentals are built on a house of cards.

Netflix on Monday posted adjusted earnings per share of 31 cents. Revenue was $1.02 billion. Wall Street expected slightly more than $1 billion in revenue and earnings of 18 cents to 19 cents a share. A year ago during the same quarter, the company lost $5 million, or 8 cents a share, on revenue of $870 million.

The company also today disclosed its intention to offer a new family streaming plan in the United States. In a letter released to shareholders, Netflix said that the upcoming offering would cost $12 and let subscribers stream as many as four devices simultaneously. Netflix's current plan, which costs $8 a month, allows a couple of streams at the same time. Management predicted that "fewer than 1 percent" of current subscribers would be attracted.

In advance of the earnings report, shares of Netflix rallied on the expectation of good news with the stock climbing more than 6.7 percent for the day. They rose nearly 25 percent in after-hours trading.

In February, Netflix flexed its muscles -- particularly in the direction of HBO -- with its production of the miniseries "House of Cards," releasing all 13 episodes simultaneously. Coming into today's earnings call, one big question on the minds of Netflix watchers was how the decision to let users decide when to watch the drama would pay off. Now the data is available for a first look.

During the quarter, Netflix added over 3 million streaming members, bringing the total to more than 36 million. Netflix said it had signed another 2.03 million domestic subscribers, bringing the total in the United States to 29.17 million subscribers, up from 23.41 million a year earlier. The company said it had added 1.02 million subscribers outside of the U.S., raising its international subscriber base to 7.04 million from 3.07 million during the same quarter in 2012.

"House of Cards" was Netflix's biggest foray into offering an original series -- but not its only one. Netflix plans another season of "Lilyhammer" as well as a new season for the canceled series "Arrested Development." Also in the works are shows from comedian Ricky Gervais, and Jenji Kohan, who created the cable hit "Weeds." The 13 episodes of the horror series "Hemlock Grove" went live last Friday.