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By Ian Sherr Dow Jones Newswires
SAN FRANCISCO (Dow Jones) - Netflix Inc. (NFLX) were better than expected fourth-quarter earnings rose more than 63% of subscribers last year, news that probably debate as to whether the actions of the online video streaming service fuel are overvalued.
During the quarter ended December 31, the company has over 3 million subscribers, which contributes to the turnover of 34% to $ 595.9 million. The company said it expects a strong first quarter is from 21900000 to 22800000.
The good results that investors are vigorously debating the value of Los Gatos, California based company. Netflix share of trade at 50 times expected earnings, making it about three times more expensive than shares of a typical technology company. The company has a frequent target of short sellers, stocks should sell borrowed stock declines.
Noted shorts Whitney Tilson, T2 Partners LLC, argued in an open letter last month that its shares would be under pressure as growth slows and streaming subscriber costs. Like others, he argues, the cost of doing business, user growth company in the near future will overshadow the lower margins.
The result shows did little to dispel these concerns. Analysts quickly to less marketing costs as a reason for the company as performance confiscated. They said reduced marketing costs, the company will help short term but does not address long-term worries about its future.
"What I am worried about the development of the reduction in gross margin," said analyst Nick Gibbons Gradient Analytics. He had expected to see, Netflix, the gross margin growth of its cash to expand their activities.
Gross margin decreased to 34.4% from 38%.
In its fourth quarter, the company recorded an increase of 52% of the profit of $ 47.1 million, or 87 cents per share of $ 30.9 million, or 56 cents per share last year.
For the first quarter, corporate earnings forecasts between 90 cents and $ 1.13 per share and revenue of $ 684 million to $ 704 million. Analysts were looking for 87 cents and $ 674 million.
Netflix also said that investors, he "does calendar year less detailed than in the past."
Wedbush Securities analyst Michael Pachter said: "I think the reason is that they have no idea what's going to make their content costs, based on the cost of licensing of television programs and movies.
Netflix share rose 9.2% to 199.82 after hours.
-By Ian Sherr, Dow Jones Newswires, 415-439-6455; ian.sherr @ dowjones.com
- Pollock and Jennifer Lauren Roth contributed to this report.
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