NEW YORK (AP) -- Netflix shares continued to climb steadily on Wednesday even as an analyst expressed concern over rising competition and other challenges.
THE SPARK: Netflix is expected to report its fourth-quarter results after the market closes on Wednesday. While the company is likely to post a loss, investors will probably pay more attention to the company's U.S. subscriber growth.
In October Netflix predicted its service that streams video over high-speed Internet connections would add 1.3 million to 2 million subscribers during the fourth quarter, while its fading DVD-by-mail option would lose as many as 750,000 customers.
If Netflix hits the top of its growth goal, it will end the quarter with 27.1 million U.S. subscribers who pay $8 per month for the video-streaming service.
THE ANALYSIS: Aaron Kessler of Raymond James said in a client note that he expects Netflix to report generally in line results for its fourth-quarter earnings and revenue.
While the analyst said the company should continue to be the leader in digital streaming, he sees some challenges ahead, including increasing streaming competition and potential difficulty achieving incremental subscriber growth.
International expansion is also likely to continue to weigh on earnings in the intermediate term, Kessler added.
The analyst reaffirmed an "Underperform" rating on Netflix shares.
SHARE ACTION: Netflix Inc.'s stock gained $4.20, or 4.3 percent, to $102.01 in afternoon trading. The shares have traded between $52.81 and $133.43 over the past year. The Los Gatos, Calif., company's stock has risen 44 percent since October and by nearly 30 percent since early December.