By Tian Huang and Adam Satariano
(Bloomberg) – Netflix Inc., the largest U.S. mail- order movie-rental service, rose the most in more than seven years in U.S. trading after adding more than 1 million subscribers and projecting profit that beat analysts’ estimates.
Netflix advanced $10.90 to $61.87 at 11:37 a.m. New York time in Nasdaq Stock Market trading, after rising as much as 25 percent to $63.85, a new high. The gain was the biggest since October 2002, five months after the initial public offering. The shares increased 84 percent last year.
First-quarter earnings will rise to 47 cents to 58 cents a share on sales of as much as $496 million, Los Gatos, California-based Netflix said yesterday in a statement after U.S. markets closed. Analysts surveyed by Bloomberg estimated profit of 44 cents on average, and revenue of $487.4 million.
Netflix, led by founder and Chief Executive Officer Reed Hastings, is adding customers as retailers such as Blockbuster Inc. and Movie Gallery Inc. close stores. Subscribers will increase to as many as 13.8 million this quarter and 16.3 million at the end of the year, the company said. Netflix ended the fourth quarter with 12.3 million customers.
“There is still considerable subscriber growth ahead for the company,” Heath Terry, an analyst with FBR Capital Markets, wrote in a report today. Terry raised his recommendation on Netflix to “outperform” from “market perform.”
Earnings for the full year will be $2.28 to $2.50 a share on sales of as much as $2.11 billion, Netflix said. That compares with analysts’ estimates of earnings of $2.22 a share and revenue of $2.04 billion.

–Editors: Cécile Daurat, Andrea Snyder

To contact the reporter on this story: Tian Huang in New York at +1-212-617-2703 or thuang57@bloomberg.net; Adam Satariano in San Francisco at +1-415-617-7204 or asatariano1@bloomberg.net

To contact the editor responsible for this story: Jennifer Sondag at +1-212-617-2716 or jsondag@bloomberg.net

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