Netflix Inc., the online and mail-order video-rental service, said it contained a subscriber revolt and forecast improving margins for its streaming business. The shares advanced on the news Wednesday.
“Since we significantly outperformed our 8 percent domestic streaming contribution margin target in Q4, we are increasing our Q1 contribution margin target to approximately 11 percent,” Los Gatos, California-based Netflix said in a statement.
The results confirm Chief Executive Officer Reed Hastings is adding customers again after a subscriber revolt that cost Netflix 800,000 domestic users over a pricing changes and since-aborted plans for a separate DVD service called Qwikster.
Netflix rose 15 percent to $109 in extended trading. The shares advanced 2.6 percent to $95.04 at the close in New York. They have gained 37 percent this year.
Netflix said on Jan. 4 that users of its online streaming service spent more than 2 billion hours watching films and TV shows in the final three months of 2011, a sign additions to its streaming library were restarting growth.
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