Wall Street closed mixed Monday, just ahead of Tuesday’s highly anticipated release of the September jobs report that was delayed due to the U.S. government shutdown. After the closing bell, investors weighed corporate earnings from Netflix, Inc., Discover Financial Services and Texas Instruments Incorporated.
Netflix Inc. (NASDAQ:NFLX) soared past Wall Street expectations and reported fiscal third-quarter earnings of 52 cents a share on revenue of $1.11 billion, topping analysts’ expectations for EPS of 49 cents on $1.1 billion in revenue, according to analysts polled by Reuters. During the same period a year ago, Netflix posted a profit of 13 cents a share on revenue of $905 million.
“We are very pleased to have over 40 million members, up from less than 30 million just one year ago,” Netflix said in the company's third-quarter earnings statement. “The Netflix original series 'Orange is the New Black' is a critical and popular success, and our earlier series 'House of Cards' is the first Internet TV series to win a Primetime Emmy Award. We launched our 41st country and the Dutch seem to like Netflix.”
For the fourth quarter, Netflix forecasts total U.S. and international video-streaming subscribers of 42.8 million to 44.4 million. In addition, the online-streaming service expects earnings between 47 cents and 73 cents a share for the fourth-quarter.
On Monday, shares of Netflix skyrocketed 10.59 percent to $392.57 in extended-hours trading.
Also after the bell on Monday, Discover Financial Services (NYSE:DFS) missed earnings expectations and posted a drop in profit as net income fell 8 percent in the third-quarter. The company issued fiscal third-quarter earnings of $1.20 on revenue of $2.06 billion, just shy of Wall Street expectations of $1.19 per share on revenue of $2.07 billion, according to analysts polled by Reuters.
For the quarter, Discover reported a profit of $579 million, compared with net income of $631 million, or $1.24 per share, during the same quarter a year-ago.
"Discover's card loan growth continues to exceed industry growth while charge-offs achieved new record lows," said David Nelms, chairman and CEO of Discover. "During the quarter, we launched Discover Home Equity Loans as we continue to expand our direct banking product suite to more broadly serve consumer needs."
Shares of Discover Financial Services fell 4.17 percent to $51.50 in after-hours trading.
Texas Instruments Incorporated (NASDAQ:TXN) reported fiscal third-quarter earnings of 56 cents a share on revenue of $3.24 billion, topping analysts’ expectations for earnings of 53 cents per share on revenue of $3.23 billion, according to Reuters. During the same period a year-ago, the company issued a profit of 67 cents a share on revenue of $3.39 billion.
Despite beating EPS estimates, Texas Instruments disappointed investors after it said it expects fourth-quarter profit to come in between 42 cents to 50 cents, below Wall Street estimates.
"Our third-quarter performance reflects the positive structural changes we've made at TI over the past few years as we've focused on Analog and Embedded Processing,” said Rich Templeton, Texas Instruments’ chairman, president and CEO. "At the mid-point of our fourth-quarter guidance range, revenue would decline 8 percent sequentially and be about even with the fourth quarter of 2012. Excluding legacy wireless revenue, which should decline to about $50 million in the fourth quarter, the mid-point of our outlook would deliver 8 percent growth from a year ago."
Texas Instruments fell as much as 3.1 percent to $39.73 per share in after-hours trading following the announcement.
Ahead on Tuesday’s earnings calendar, notable companies reporting include Delta Air Lines, Inc. (NYSE:DAL), McGraw Hill Financial Inc (NYSE:MHFI) and Lockheed Martin Corp. (NYSE:LMT).
The Dow Jones Industrial Average fell 7.45 points or 0.05 percent, to close at 15,392.20. The S&P 500 gained 0.16 points or 0.01 percent, to end at 1,744.66. The Nasdaq Composite added 5.77 points or 0.15 percent, to finish at 3,920.05.