Earnings Results: Netflix stock leaps after subscriber success in final quarter with Reed Hastings as CEO

by | Jan 19, 2023 | Stock Market

Netflix Inc. added more subscribers than expected in the final quarter of 2022, sending shares higher in after-hours trading Thursday even as founder Reed Hastings prepared to step down from the chief executive role he has held since the company’s inception. Netflix
NFLX,
-3.23%
announced that Hastings has moved to an executive chairman role, while Chief Operating Officer Greg Peters moves up to co-CEO, joining Ted Sarandos.

“Since Reed started to delegate management to us, Greg and I have built a strong operating model based on our shared values and like-minded approach to growth,” Sarandos said in a letter to shareholders. “I am so excited to start this new chapter with Greg as co-CEO.” In a separate letter, Hastings said “in the last 2½ years, I’ve increasingly delegated the management of Netflix” to Sarandos and Peters. “It was a baptism by fire, given COVID and recent challenges within our business. But they’ve both managed incredibly well, ensuring Netflix continues to improve and developing a clear path to reaccelerate our revenue and earnings growth,” Hastings wrote. “So the board and I believe it’s the right time to complete my succession.” The company revealed on Thursday fourth-quarter revenue of $7.85 billion, compared with $7.71 billion a year ago. Earnings were $55 million, or 12 cents a share, down from $607 million, or $1.33 a share, last year; the decline was due to a $463 million noncash charge related to debt held in Europe, executives said. Wall Street analysts tracked by FactSet had estimated revenue of $7.86 billion on earnings of 55 cents a share. Shares increased more than 6% in after-hours trading immediately following the release of the results, after closing with a 3.2% decrease at $315.78. The streaming-video company reported that it added 7.7 million subscribers in the …

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