Breaking Down Netflix's 3rd-Qtr Earnings Report

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Oct. 21 (Bloomberg) -- Bloomberg's Jon Erlichman breaks down Netflix's third-quarter earnings report. He speaks on Bloomberg Television's "Street Smart." (Source: Bloomberg)

Loco's tacos.

The estimate on wall street was the netflix would generate close to 1.1 billion dollars in revenue.

They cleared that number.

Call it roughly 1.1 one billion dollars.

-- $1.11 billion.

And encouraging outlook, too.

The company suggesting that its earnings per share could be anything more than 43 cents per share.

$.44 for the estimate.

That could suggested that profitability gets better as you get more subscribers online.

And those numbers are growing.

There was an expectation that total streaming subscribers that the u.s. would have in the u.s. during this timeframe would be around 31 million.

They cleared that number.

An internationally, i think this is the more important story -- there was an estimate on wall street that netflix would clear 8.5 million streaming subscribers, which was about double what it was last year.

It was even greater than that.

Almost 9.2 million subscribers.

Looking ahead to the fourth quarter, netflix is giving us an idea of how that number will continue to climb.

Internationally, 10.5 million.

33 million in the u.s., and that makes 43 million subscribers by the end of this fiscal year.

Even though the stock has had a huge run-up this year, it could be bananas with this company.

I think it is because people say, ok, they are adding more streaming subscribers and that helps the profitability story for a company that has a lot of bottom line line and cost concerns.

It has been a big issue, how much they might have to pay for content and how much -- how that might affect their profitability.

With each and every subscriber that you had, you basically cut down on the content cost.

You do, assuming they are paying for the surface -- the service.

Netflix tells you the total number of subscribers and the total number of paid subscribers.

This is part of how netflix works, though.

They take -- they encourage people to take those one month free samples.

They even know that some people who have sampled netflix before we'll sample it again for free.

The hope is that they will continue to hook you.

Because you watched "house of cards" or "orange is the new black." or i'm getting tired of my cable bill and i'm going to watch netflix.

It is changing the way deals for content are getting cut and how all of the players and about their business models.

The skeptics get pushed to the side that much more.

You talk about domestics and that is the main subscriber in the u.s. overseas, there are ladies you cannot access netflix yet and everybody wants to.

How close are they getting to deals in other markets?

They are hungry for that.

That is the one thing they can do differently than a lot of the channels here in the u.s. more than 900 million international subscribers suggests they are having strength with that.

They went through a time where they hit the bottom line cost, but when you have a bigger presence in europe -- one thing you should know about netflix is that they do sit around the table and thing, where can we go and the?

-- go and be?

They are not dealing with some issues like piracy.

They go to -- they try to avoid the markets where there is a big cool of piracy first so that they can find people who will pay eight dollars for all-you- can-eat, maybe on top of the cable bill.

We are showing viewers at the bottom of the screen, stock is up seven percent to nine

This text has been automatically generated. It may not be 100% accurate.

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