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JANUARY 23, 2013, 5:11 PM

A Resurgent Netflix Beats Projections, Even Its Own

By BRIAN STELTER

9:12 p.m. | Updated For all those who have doubted its business acumen, Netflix had a

resounding answer on Wednesday: 27.15 million.

That's the number of American homes that were subscribers to the streaming service by

the end of 2012, beating the company's own projections for the fourth quarter after a

couple of quarters of underwhelming results.

Netflix's growth spurt in streaming - up by 2.05 million customers in the United States,

from 25.1 million in the third quarter - was its biggest in nearly three years, and helped

the company report net income of $7.9 million, surprising many analysts who had

predicted a loss.

The results reflected just how far Netflix has come since the turbulence of mid-2011,

when its botched execution of a new pricing plan for its services - streaming and DVDs by

mail - resulted in an online flogging by angry customers. Investors battered its stock

price, sending it from a high of around $300 in 2011 to as low as $53 last year.

"It's risen from the ashes," said Barton Crockett, a senior analyst at Lazard Capital

Markets. "A lot of investors have been very skeptical that Netflix will work. With this

earnings report, they're making a strong argument that the business is real, that it will

work."

Investors, cheered by the results, sent Netflix shares soaring more than 35 percent in

after-hours trading Wednesday. The stock had ended regular trading at $103.26.

Netflix's fourth-quarter success was a convenient reminder to the entertainment and

technology industries that consumers increasingly want on-demand access to television

shows and movies. Streaming services by Amazon, Hulu and Redbox are all competing on

the same playing field, but for now Netflix remains the biggest such service, and thus a

pioneer for all the others.

"Our growth and our competitors' growth shows just how large the opportunity is for

Internet TV, where people get to control their viewing experience," Netflix's chief

executive, Reed Hastings, said in a telephone interview Wednesday evening.

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