Netflix soars as hot subscriber growth restores faith

Netflix is growing faster than even its most bullish fans on Wall Street predicted, soothing doubts about its global prospects and sending its already-stratospheric stock higher.

After a stumble with its previous results, the world’s largest paid online TV network added far more subscribers than analysts expected in the third quarter. Netflix also issued an upbeat outlook for the current three months, saying it plans to add 28.9 million customers in total this year, a new record for the 21-year-old company.

The results should prolong Netflix’s reign as one of the best-performing stocks on Wall Street, giving the company leeway to spend billions of dollars more on original programming. Netflix has parlayed subscriber growth into huge gains for investors.

Even before the after-hours surge on Tuesday, the shares were up 80 percent this year. They closed Wednesday up 5.28 percent to $364.70.

“There is so much growth ahead in streaming video entertainment, we’re going to focus on that for a very long time,” Chief Executive Officer Reed Hastings said during a pretaped interview with analysts.

Netflix signed up 6.96 million customers in the third quarter, boosting its global total to 137.1 million. That sent the shares up as much as 17 percent in extended trading.

Netflix doesn’t hide its formula for success. It invests billions in original programming and uses those new TV shows and movies to lure subscribers. The Los Gatos, Calif.-based streaming company released a record 676 hours of original programming in the third quarter, according to Cowen & Co. That marked the first time it has exceeded 500 hours in any quarter.

International territories remain the key to the company’s future, and accounted for 84 percent of Netflix’s new customers in the third quarter.