Bolstered by its exclusive hit series “House of Cards,” starring...

Bolstered by its exclusive hit series “House of Cards,” starring Kevin Spacey and Robin Wright, Netflix said it had added 2 million U.S. subscribers in the year’s first three months. Credit: AP

Netflix's move to compete against traditional cable-TV channels with original programming is pulling in more subscribers to its Internet video service and winning back investors who doubted the company's ability to develop distinctive entertainment.

The skepticism dissipated Monday with the release of Netflix's financial results for the opening three months of the year.

The first-quarter numbers showed Netflix Inc. added 2 million U.S. subscribers from January through March -- hitting the top end of the target set by the company's management. The growth left Netflix with 29.2 million U.S. subscribers to an $8-per-month service that streams movie and TV shows to Internet-connected devices.

Those first-quarter gains, coupled with signs that Netflix's profit margins are widening, delighted investors. The company's stock soared $42.54, or 24 percent, to $216.91 after the results came out following the close of regular trading.

Netflix's stock had plummeted to as low as $52.81 in a fall that began in July 2011 when the company outraged its U.S. subscribers with pricing adjustments.

To grow the company, CEO Reed Hastings decided Netflix should become more like Time Warner Inc.'s HBO channel and develop more series that can't be seen anywhere else. Previously, Netflix had primarily licensed content.

The company took its first major leap in the new direction in early February with the debut of "House of Cards," a critically acclaimed series made exclusively for Netflix. Netflix released all 13 episodes of "House of Cards" at once.

Netflix eked out a profit of $2.7 million, or 5 cents per share, in the first quarter. That contrasted with a loss of $4.6 million, or 8 cents per share, last year.

If not for the costs for refinancing some of Netflix's debt, the company said it would have earned 31 cents per share. That figure topped the average analyst estimate of 18 cents per share.

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