Consumers spent the second half of 2011 grumbling about changes at Netflix Inc. , and investors grumbled along with them: The stock slid nearly 80 per cent since the middle of July. Now, it seems, all is forgiven.
The shares surged 9.7 per cent as of Wednesday afternoon, after the company disclosed that while consumers are grumbling, they’re doing it while watching an awful lot of online content. Netflix, which provides DVD mail-in service and online TV- and movie-streaming, reported that the streaming part of the business delivered more than 2 billion hours of content in the fourth quarter of 2011.
That’s well ahead of expectations. As recently as December, Netflix chief executive Reed Hastings had said that streaming hours in the fourth quarter would be over 1 billion. Bloomberg News noted that Richard Greenfield, an analyst at BTIG Research, had a 1.2 billion hour estimate for the quarter.
So far, Netflix hasn’t said much about the big beat. In a statement, Mr. Hastings said: “We were thrilled to deliver more than two billion hours of TV shows and movies across 45 countries in the fourth quarter.”