Netflix stock hits all-time high after price hike for US subscribers

• John Lynch
 

• 16h
• 3,678

Netflix CEO Reed Hastings.Kevork Djansezian/Getty Images

NFLX Netflix

 194.88 0.38 (+0.20 %)

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Netflix shares reached a record high on Thursday, following the company's decision to raise its prices for US subscribers. 

Netflix stock closed at $194.39 per share on Thursday, up 5.4% for the day.

The figure is an all-time high, according to Variety.

Netflix raised the price of its most popular "standard plan" service to $10.99 a month from $9.99.

Its highest-tier plan, which supports 4K video resolution and four simultaneous streams, will increase to $13.99 a month from $11.99.

The company's lowest-tier plan will not change from its current price of $7.99 per month.

The stock surge suggests investors are confident the price increase won't cause big subscriber losses, as Netflix has continued to improve the quality of its content offering over the last year, and has therefore boosted its pricing power. 

RBC analysts have estimated that Netflix's price hike will boost its revenue by about $650 million in 2018.

The price increase comes as Netflix continues to spend more money on content. The company will spend close to $7 billion next year, according to its content boss, Ted Sarandos.

SEE ALSO: Netflix is raising its prices starting this month

MORE HERE: Netflix's price hike could boost its revenue by about $650 million in 2018, according to RBC

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Costco steps up grocery battle with new delivery services

• Reuters

• 1h
• 21

FILE PHOTO: A Costco Wholesale retail club is photographed in Austin, Texas, U.S. Thomson Reuters

(Reuters) - Costco Wholesale Corp has rolled out two new grocery delivery services this week, a new step in its efforts to fight growing competition from Amazon.comand Wal-Mart Stores Inc .

Costco Chief Financial Officer Richard Galanti said in the company's post-results call that the membership-based chain had started offering two-day delivery of dry groceries as well as a same-day delivery service for groceries including fresh foods.

The two-day delivery service would be free for online orders over $75 across the United States, while the same-day service - offered through its partner Instacart - is available at 376 U.S. stores.

Competition among U.S. grocery retailers has been tightening, particularly since Amazon bought Whole Foods and reduced prices at the upmarket grocer in August.

Wal-Mart and Kroger Co , the leading U.S. grocery retailers, have lost the most customers to Whole Foods due to the price cuts, a study conducted by a data analytics firm showed this week.

Galanti said that Costco had not seen any impact from Whole Foods' price cuts.

"(Costco's) new online delivery initiatives improve its competitive offering and could drive increased engagement with millennials," Jefferies analyst Daniel Binder wrote in a note.

"Provided they don't simply cannibalize store sales, the stronger omni-channel effort could prove accretive to sales and EBIT dollars," he added.

Costco shares were down 2.7 percent at $162.55 in premarket trading on Friday, as a fall in its fourth-quarter gross margins fueled concerns of an intensifying grocery price war.

(Reporting by Sruthi Ramakrishnan in Bengaluru; editing by Patrick Graham)

Republicans just took their first step toward passing their massive tax reform plan

• Bob Bryan
 

• 18h
• 2,026

House Speaker Paul Ryan Alex Wong/Getty Images

The House passed a budget resolution on Thursday that served as the first step toward Republicans passing a massive tax reform plan.

The resolution, which passed by a vote of 219 to 206, included in it instructions for what is known as budget reconciliation. Reconciliation allows a bill to pass the Senate without being subject to a filibuster, a crucial hurdle for the GOP to move eventual tax legislation. 

The $4.1 trillion budget will likely be heavily edited before it is officially signed into law by President Donald Trump.

The Senate Budget Committee is expected to roll out their own budget resolution in the coming days, which would then need approval by the entire chamber. From there, the House would either need to pass the Senate version of the budget without any changes or go to a conference committee to work out the differences.

The passage Thursday represented the first legislative step for Republicans to enact their vision for tax reform. The proposed plan from Trump and GOP leaders aims to lower the corporate tax rate and overhaul individual rates. 

Republicans and conservative groups applauded the House passage, celebrating the concrete move towards tax cuts. The White House issued an enthusiastic statement on the resolution making it through the chamber.

"This resolution is a key step towards Making America Great Again by supporting the Administration’s legislative agenda, as it, among other things, drives economic growth and job creation, creates a pathway to fix our rigged and burdensome tax code and establishes a framework for rebuilding our military and securing the border," said the statement. "President Trump looks forward to working with both chambers of Congress to enact a budget as soon as possible."

Eighteen Republicans voted against the measures for a variety of reasons. The two major factions appeared to be conservatives favoring deeper cuts to spending than in the resolution  passed and members from Democratic states that oppose the tax plan's repeal of the state and local tax deduction.

There are a number of hoops for Republican lawmakers to get through to pass the tax reform package — not the least of which is actually writing the tax bill.

SEE ALSO: Trump's massive tax plan is already hitting some big roadblocks

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