Netflix shares soar as profit quadruples

October 21, 2013
ENTERTAINMENT
Netflix shares soar as profit quadruples

Netflix’s profit quadrupled in the third quarter as it added a higher-than-expected 1.3 million subscribers to its subscription video-streaming service, sending shares up 10.7 percent in after-hours trading.

Net income for the quarter reached $32 million, up from $8 million a year earlier, Netflix said in its quarterly letter to shareholders. Netflix reported earnings-per-share of 52 cents, beating the average of 49 cents projected by analysts. Revenue rose 22 percent from last year to $1.1 billion.

Total subscribers to the U.S. streaming service, the biggest part of its business, reached 31.1 million. Netflix added 1.4 million customers in international markets, bringing its reach in foreign territories to 9.2 million.

During the quarter, Netflix released critically praised prison drama “Orange is the New Black,” part of its investment in exclusive original programming to keep and attract customers to its $8-a-month movie and TV streaming service.

Its original series slate attracted buzz during the quarter with 14 Emmy nominations and three wins for shows including political thriller “House of Cards.”

Netflix also was added in September as an option on cable set-top boxes to two systems in Europe.

— Reuters

VENTURE CAPITAL
Khosla, Gates put up $100 million for Kior

The Silicon Valley venture capital firm run by Vinod Khosla has pledged to inject an additional $85 million into the cash-starved biofuel maker Kior, and a Bill Gates fund is going to chip in $15 million, too.

Kior, which has fallen far short of its production forecasts this year, said Monday that Khosla and Gates will help finance a second refinery, which will convert wood chips into gasoline and diesel. Kior chief executive Fred Cannon said the company could be cash-flow positive in 2015.

Khosla said in an interview that he will increase his total investment in the company to $125 million and that Gates will invest $15 million.

Kior says it can convert wood chips and agricultural waste into oil products identical to those based on crude oil. Other companies are trying to use similar technology to produce cellulosic ethanol.

A year ago, Kior said it expected to produce 13 million gallons of motor fuel this year, but Cannon said in an interview Sunday that he expects production to total just 1 million to 2 million gallons. A group of investors has filed a lawsuit against the company, accusing it of misrepresentation.

— Steven Mufson

Also in Business

A European Parliament committee on Monday approved sweeping new data-protection rules that would strengthen online privacy and outlaw the kind of data transfers that the United States used for its secret spying program. The draft regulation was beefed up after Edward Snowden’s leaks about allegedly widespread U.S. online snooping to include even more stringent privacy protection and stiff fines for violations. After 18 months of wrangling and fierce industry lobbying, the legislation easily passed late Monday with a 49 to 3 committee vote, with one abstention.

McDonald’s, the world’s largest restaurant chain, posted third-quarter sales that trailed analysts’ estimates as gains slowed in the United States, and said global sales this month may be little changed. Revenue rose 2.4 percent, to $7.32 billion, the Oak Brook, Ill.-based company said Monday. The average of analysts’ estimates was $7.33 billion.

Hyundai decided to recall about 27,500 Genesis luxury cars Monday, hours after the National Highway Traffic Safety Administration opened an investigation into problems with their brakes. The automaker said the recall covers cars from the 2009 through 2012 model years. Owners will be notified of the recall by mail starting in November, and dealers will pick up the cars and bring out a loaner vehicle, spokesman Miles Johnson said Monday.

Caesars Entertainment said U.S. regulators and a grand jury are investigating alleged Bank Secrecy Act violations at its flagship Las Vegas casino. Nevada gaming officials are also involved. Desert Palace, the owner of Caesars Palace, was told Oct. 11 that the Treasury Department’s Financial Crimes Enforcement Network is investigating whether to assess a civil penalty and take enforcement action, the Las Vegas-based casino operator said Monday in a regulatory filing. A U.S. grand jury is investigating, Caesars said. The company declined further comment.

— From news services

Coming Today

8:30 a.m.: September jobs report released.

Earnings: Delta Air Lines, Harley-Davidson.

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