Netflix shares leap following third-quarter earnings beat

Netflix shares surged as much as 12% in after-hours trading following the release of its third-quarter earnings on Tuesday.

The streaming giant's earnings of $403m, or $0.89 on a per share basis, topped Wall Street estimates of a $0.68 reading.

Netflix recorded revenues of $4bn, bang in line with consensus estimates, and also added 6.96m subscribers, 1.09m of which were from the US, to end the quarter with 137m users.

Streaming revenue grew 36% year-on-year during the third quarter. However, international revenue dropped $90m as a result of currency fluctuations.

Netflix said: "Our broad slate of original programming helped drive a solid quarter of growth with streaming revenue increasing 36% year over year and global membership surpassing 130 million paid and 137m total. We're thrilled to be growing internet entertainment across the globe."

Netflix now expects to add 9.4m subscribers during the fourth quarter.

The industry behemoth, which added new seasons of Orange is the New Black, Luke Cage and Bojack Horseman during the period, also told investors that it will be leaning harder on its own in-house studios moving forward, pumping $8bn into its own productions rather than licensing content.

"Next quarter, we expect to reclassify certain personnel costs from G&A to content and marketing, and from technology and development to other cost of revenues," the company wrote in a note to shareholders.

As of 2200 BST, Netflix shares were up 11.72% in after-hours trading at $386.99 each.