Netflix, Inc. (NASDAQ: NFLX)
Netflix shares got hammered to $344.24 in extended trading Monday, after the streaming giant fell short of its second-quarter subscriber target.
The company “only” managed to add 5.2 million new customers during the period, well below its forecast of 6.2 million and Wall Street’s estimates of 6.27 million.
Revenue also missed expectations, but earnings beat the mark. NFLX stock was trading at $353.08 after going down $47.49, or 11.86% before the opening bell Tuesday.
NTLX Earnings & Outlook
The company announced earnings of $384 million, or $0.85 per share, compared with earnings of $316 million, or $0.70 per shares in the year-ago quarter.
Revenue increased to $3.907 billion from $2.785 billion in the second quarter of last year. Analysts had expected earnings of $0.79 on revenue of 3.94 billion, according to figures compiled by Thompson Reuters.
Domestic and International streaming segments added 670,000 and 4.47 million subscribers, respectively.
Netflix expected subscriber additions of 1.2 million in the Domestic segment, and 5.04 million in the International segment.
For the third quarter, the California-based firm projects revenue of $3.988 billion below the average estimate for $4.126 billion. International streaming net additions are projected at 4.35 million, below the consensus for 5.095 million.
Meanwhile, domestic subscriber net additions are estimated at 650,000 below the consensus for 953,000.
Netflix Company Comments
Netflix took note of the growing competition in its second-quarter earnings shareholder letter: “YouTube and Netflix are two leading global (ex-China) internet entertainment services. HBO and Disney are evolving to focus on internet entertainment services. Amazon and Apple are investing in content as part of larger ecosystem subscriptions. Each of these firms has unique content and is striving to find the best creators from around the world to entertain its viewers. There has never been a better time to be a creator or consumer of content.”
The letter continued; “We believe that consumer appetite for great content is broad and that there is room for multiple parties to have attractive offerings. We anticipate more competition from the combined AT&T/Warner Media, from the combined Fox/Disney or Fox/Comcast as well as from international players like Germany’s ProSieben and Salto in France. Our strategy is to simply keep improving, as we’ve been doing every year in the past.”
Netflix, Inc. Company Profile
Netflix is an Internet subscription service company that is engaged in the Internet delivery of movies and television (TV) shows on a host of Internet-connected screens.
Its segments of operation are as follows: Domestic Streaming, International Streaming, and Domestic DVD. The firm offers movies and TV shows, including feature films, original series, and documentaries.
Netflix subscribers can stream content through various Internet-connected screens, such as television set-top boxes, TVs, mobile devices, and digital video players. It also offers DVDs-by-mail membership services.
The company had approximately 130 million members in 190 countries as of July 30, 2018. Netflix was founded in 1997 by Wilmot Reed Hastings Jr., and Marc Randolph. Its headquarters are based in Los Gatos, California. –Reuters
