Netflix plunges as subscriber growth disappoints

Gladys Abbott
July 17, 2018

The company's total monthly customers reached 130 million worldwide, 1 million fewer than forecasts from Thomson Reuters, as it added new programming including "Lost in Space" and new episodes of Marvel's "Jessica Jones" and "13 Reasons Why".

Well to many adding 4.47 million subscribers and hitting a new all-time high in subscribers sounds great to wall street they wanted to see a higher subscriber count.

During the quarter, net income rose 32.5 percent, to $384.3 million, or 85 cents a share, from $65.6 million, or 15 cents, a year earlier.

Looking ahead to the next quarter, Netflix is already anticipating additional challenges to subscriber growth. "Now future projections are suspect and that decimates valuation", said Eric Schiffer, chief executive officer of private equity firm Patriarch.

Principal analyst for Emarketer Paul Verna suggested that things might be more positive for the streaming site stateside, thanks to shows like Stranger Things, Orange Is The New Black and House of Cards set to release new seasons in the coming months. It posted $3.91 billion, compared with an average estimate of $3.94 billion. For the current quarter ending in October, Netflix said it expects revenue in the range of $3.99 billion.

Revenue for the quarter came in at $3.91 billion, lower than the $3.94 billion analyst estimate.

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Bloomberg expects the company to release 700 global original releases this year, and says Netflix is on track to spend $8 billion making them - $1 billion higher than it expected.

"We had a strong but not stellar quarter, " the company wrote in a letter to shareholders.

The Silicon Valley based company noted that it is beginning to "lead artistically" in some categories with its original content, earning enough Emmy nominations this year to break a 17-year top-spot streak by HBO.

Competition in the streaming television market includes YouTube, a platform under the umbrella of Google parent Alphabet, and entertainment titan Disney, along with AT&T.

Inc plans to add more regional content in India as it builds the Prime video service around the world.

"Our strategy is to simply keep improving", Hastings said in the letter to shareholders, "as we've been doing every year in the past".

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