Netflix Shares Surge as CEO Talks Up New Shows
LOS GATOS, Calif. (TheStreet) -- Netflix(NFLX) investors, after enduring a depressing 2011, are growing upbeat following CEO Reed Hastings' comments that subscriptions are climbing.
The stock surged 13% today, bringing the year's gain to 4%.
Clearly, investors are getting over last year's blunders, which included a poorly handled subscription-price hike and an ill-conceived plan to split up the company's DVD-by-mail and streaming businesses.
In a Facebook(FB) blog post on Tuesday, Hastings said that the company's monthly viewing exceeded 1 billion hours for the first time ever in June. The stock market was closed yesterday for the Fourth of July holiday.
Hastings, who was voted "worst tech CEO of 2011" by TheStreet's readers, expects a couple of upcoming shows to increase viewership. "When House of Cards and Arrested Development debut, we'll blow these records away," he said.
In March, Chief Content Officer Ted Sarandos said the company will bring the eagerly anticipated political thriller House of Cards exclusively to its customers later this year. Starring Kevin Spacey and directed by David Fincher, House of Cards is a remake of a popular U.K. mini-series from the 1990s.
Netflix will also premiere 10 new episodes of cult comedy Arrested Development in 2013, according to media reports.
Still, there are plenty of investors who remain wary of Netflix. The company's shares have plunged more than 71% over the past 12 months, as investors digested its non-stop travails.
Netflix shares, for example, took a dive after its first-quarter results earlier this year when the online entertainment company gave weak guidance for its streaming business.
At least one analyst, though, thinks the Los Gatos, Calif.-based firm represents a buying opportunity.
Citigroup analyst Mark Mahaney reiterated his "buy" rating and $130 price target earlier this week, citing the company's "highly reasonable" valuation.
"Competition remains a very significant risk, but Netflix's execution track record -- even with the second half of 2011 pricing and product mistakes -- is relatively strong," he said.
The analyst added that Netflix's streaming story is still in its early days thanks to the relatively recent take-up of tablets, smart TVs and mobile broadband devices.
Netflix will report its second-quarter results after market close on July 24.
Analysts surveyed by Thomson Reuters are looking for revenue of $888.96 million and earnings of 5 cents a share, compared to $788.61 million and adjusted earnings of $1.26 a share in the prior year's quarter.
--Written by James Rogers in New York.
>To submit a news tip, send an email to: email@example.com.