Netflix shares rose 17% after the company posted net income of $3 million in the first quarter of the year, up from a loss of $5 million during the same period of 2012.
Netflix passed US $1 billion in quarterly sales for the first time in the first quarter. The VoD service recorded sales of USD 1.02 billion, versus 870 million a year earlier, and moved to an operating profit of USD 32 million versus a loss of USD 2 million.
Net profit came in at US $3 million, below its forecast for a flat result versus Q4’s US $8 million, due to one-time costs for paying off debt. Free cash flow was better than expected, at a negative US $42 million versus US $51 million last quarter. Netflix earlier said it expected cash burn to increase sequentially due to costs for creating original programming.
The company in February unveiled an exclusive, original series called “House of Cards” that media analysts have said could shake up the entertainment realm.
“The strong viewing across all our markets gives us faith in our ability to create global content brands in a cost-effective, efficient way,” Netflix said in an investor letter accompanying its earnings release.
The US base grew by 2.03 million in the three months to 29.12 million and international customers grew by 1.02 million to a total 7.14 million.
International activities generated a loss of US $77 million, and this is expected to continue in Q2 due to high expenditures in content . Netflix said it plans to launch in an additional European market during the second half of 2013.
The company said it added 3.05 million streaming members globally, with 2.03 million coming from the U.S. and the other 1.02 million coming from international markets.