By Rex Crum, MarketWatch

SAN FRANCISCO (MarketWatch) -- Netflix Inc. claimed the tech sector spotlight Tuesday as the Internet-based video-streaming company's shares surged in the wake of an upbeat quarterly earnings report and plans to increase prices for new subscribers in order to help acquire more online video content.

Netflix (NFLX) shares rose 7% to close at $372.90 a share after the company said late Monday that it earned $53 million, or 86 cents a share, on revenue of $1.27 billion for its first quarter. During the same period a year ago, Netflix earned 5 cents a share on $1.02 billion in sales. Analysts surveyed by FactSet had forecast Netflix to earn 81 cents a share on revenue of $1.27 billion.

The company also said it added 2.25 million video-streaming subscribers in the U.S. to meet its own forecasts, and ended the quarter with 35.7 million domestic streaming members. International subscribers grew by 1.75 million members to 12.7 million.

On a conference call to discuss Netflix's results, Chief Executive Reed Hastings cited the impact of the company's original series, and in particular the political drama "House of Cards" among the factors in Netflix's subscriber growth.

"As has been the case for a while, [there are] a variety of factors at play," added analyst Mark Mahaney of RBC Capital Markets. "Strong execution, especially in international markets, rising customer satisfaction, a larger installed base of connected devices, the lack, so far, of a compelling alternative in most markets, and the impact of original series."

Netflix also said it would raise the monthly fee for new subscribers by $1 or $2 beginning later this quarter, but that current customers would have their rates grandfathered in for "a generous time."

Aaron Kessler, of Raymond James, raised his rating on Netflix to outperform, or buy, from market perform and set a price target of $450 a share on Netflix's stock. Kessler called Netflix's price increase "modest" and said it should lead to improvement in content and user growth.

"We believe price increases will enable Netflix to continue to invest in higher quality content and thus attract more users," Kessler said.

(Read more about the growing rivalry between Netflix and cable ISP giant Comcast Corp: http://www.marketwatch.com/story/shades-of-apple-microsoft-in-netflix-comcast-griping-2014-04-22.)

With Netflix leading the way, most of the rest of the tech sector also rose. Gains came from Facebook Inc. (FB), Pandora Media Inc. (P), Microsoft Corp. (MSFT) and Micron Technology Inc. (MU).

VMware Inc. (VMW), which was set to report quarterly results after the close of trading Tuesday, rose 31 cents a share to close at $105.15.

One of the day's notable decliners was printing-technology company Lexmark International Inc. (LXK), which fell more than 11% to close at $41.52

a share. Before the market opened, Lexmark reported first-quarter results that exceeded analysts' estimates, but said it expects its second-quarter sales to be down between 2% and 4% from a year ago due to its exit from the inkjet printer business.

More news from MarketWatch:

Apple, Microsoft are not the keys to this week's news

Xerox cuts full-year outlook as earnings dip

Shades of Apple-Microsoft in Netflix-Comcast griping

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