Internet giant, Netflix, shares surge on 62 million subscriber base

Netflix Inc., a provider of on-demand internet streaming media has posted quarterly revenue of $1.47 billion. The income met forecast estimates but was disappointing when averaged against its shares.

Analysts had expected a profit of 69 cents per share on revenue of $1.57 billion. The disappointing profit statement was attributed to foreign exchange losses due to the strength of the American dollar in the first quarter of 2015.

Netflix also, on Thursday, announced a subscriber base of 62 million users worldwide for the quarter ended March. The market reacted, creating a surge of its shares by 11.6 percent to $530.90 dollars in after-hours trading. A positive 4.9 million new customers were added this quarter (2.6 million new subscribers from outside the US) in its nearly 50 international markets that include the United States, Europe, Australia and New Zealand.

The favorable market reception of its report and increased subscriber base, according to Chief Executive Officer Reed Hastings, is attributed to the streaming of fresh original content including the third season of "House of Cards" and new series "Unbreakable Kimmy Schmidt" and "Bloodline".

Chart. Netflix shares to date.

In a related development, FBR analysts Barton Crockett and Howard Ma, estimate that based on its demographic survey of streaming media in the US, the share price of Netflix is expected to go up to the $900 dollars mark with an increase in subscriber base to 180 million, with 60 million from the US alone.

Netflix is also seeking shareholder approval for an increase in authorized shares. In its report, the company said it will recommend a stock split to its Board pending shareholder approval. The company also announced that it will soon be using the HTTPS protocol to authenticate and encrypt customer streams in a move that will enhance customer privacy and security online, and as a means to thwart man-in-the-middle attacks that hijack a huge chunk of internet traffic.

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