Netflix surges in premarket as it marks biggest quarter of subscriber gains ever

MarketsAssociated Press

Shares of Netflix climbed 18 percent in Wednesday premarket trading, as the company marked its biggest quarter of subscriber gains ever.

On Tuesday Netflix Inc. said that it added 4.3 million worldwide subscribers in the fourth quarter. That tops the 4.07 million added in the final three months of 2013. Earnings also rose to a new quarterly high of $83.4 million, or $1.35 per share, a 72 percent increase from the same time last year. The latest quarter included a one-time gain of $39 million from the resolution of a tax audit.

Continue Reading Below

Youssef Squali of Cantor Fitzgerald said in a client note that Netflix had a very strong quarter, with better-than-expected subscriber growth.

The analyst said that the company's international performance was the key driver in the period, with Netflix now expecting to complete its global expansion plans over the next two years while staying profitable.

The analyst also noted Netflix's touting of viewership for its "Marco Polo" series, which received poor reviews from critics but drew many viewers who watched the series to the end. Netflix has renewed the series for another season.

Squali maintained a "Buy" rating and increased its 2015 price target to $450 from $415.

Netflix's stock gained $62.72, or 18 percent, to $411.52 before the market open.