Netflix Q4 net income beats estimates

Netflix is bullish on the prospects for its new U.K. service Netflix shares surged in after-hours trading after its fourth-quarter earnings beat estimates. The Los Gatos, Calif.-based company said Wednesday that its worldwide net income was down 13% to $41 million in the fourth quarter from $47 million the year before but revenue surged 47% to $876 million. Netflix, whose subscriber numbers are studied like a bible, added 220,000 domestic streaming subscribers in the quarter, ending the year with 21.67 million subs. International streaming added 380,000 subs to 1.86 million. But domestic DVD, the company's root biz, lost 2.76 million subs from the third quarter to the fourth, ending the year with 11.17 million. That business has been eroding rapidly as people increasingly utiize Netflix's streaming service rather than its disc-by-mail offerings. Despite that dip, it appears the company added subs overall quarter to quarter, reporting an increase of 610,000 subs to 24.4 million. That's something it failed to do in the 2011 third quarter, when it lost subscribers for the first time in its history after several badly presented pricing and reconfiguration initiatives angered some customers. That caused Netflix shares, which once traded at more than $300, to slump last fall. But after some backtracking and many mea culpas, founder-CEO Reed Hastings and his team said they've moved on and have been busy inking content deals in the U.S. and U.K. where Netflix launched Jan. 9. Earlier Wednesday it announced a deal with specialty distributor Dogwoof for documentaries like "Bobby Fischer Against the World," "Gasland" and "Page One: Inside the NY Times." Contact the Variety newsroom at news@variety.com