One out of eight people in the United States subscribe to Netflix (NASDAQ:NFLX) according to a recent report, so it’s no surprise that the company’s first-quarter profit soared 88% today. The company, which specializes in online movie rental services, reported skyrocketing revenue and higher gross margins.Subscriber acquisition costs declined by a third.
Despite the optimism, shares slid 2.6% in after-hours trading to a $245.34 after Netflix announced it doesn’t expect the current quarter to be as sunny as the last. Even still, shares have increased by 43% for the year, reaching its record high of $254.98 today during the trading session.
For the current quarter, Netflix expects earnings of 93 cents to $1.15 a share on combined global revenue of $778 million to $798 million. Reuters analysts had higher hopes, projecting earnings of $1.19 per share.
Investors paying careful attention to domestic subscriber acquisition costs noted a disheartening slide of 33% alongside heightened customer cancelation. Still the cancelation numbers announced were 3.9% from 3.8% in the year-ago-period. Despite the marginally higher cancellations, Netflix announced it has 22.8 million subscribers in the U.S., a 17% increase son the quarter and 63% higher than the year-ago-period.
The company boasted profits of $60.2 million, or $1.11 a share. During the same time last year Netflix reported profits nearly half that.