No laughing matter after Netflix shares take tumble

Brenda Watkins
July 17, 2018

Earnings per share came in at 85 cents, beating the 79 cents predicted by analysts surveyed by Thomson Reuters I/B/E/S.

According to The Associated Press, "The company gained 5.1 million subscribers worldwide during the quarter, more than 1 million below the number that management had believed it could".

J.P. Morgan is expecting Netflix's gross profit to be $6.4 billion in 2018, up from $4 billion past year.

Netflix Inc. stunned Wall Street by attracting fewer subscribers than expected last quarter, renewing concerns that the video-streaming service has become an investment bubble.

Almost $23 billion was wiped off the value of Netflix last night after it missed subscriber growth and revenue forecasts for the second quarter.

In a letter to shareholders, Netflix called its second-quarter performance "strong but not stellar". In after-hours trading on Monday, Netflix shares sunk 14 percent to $343.60, down from an earlier close of $400.48. Two of its originals - "Set It Up", starring Lucy Liu and Taye Diggs, and "The Kissing Booth" - have been "watched and loved by tens of millions of Netflix members", said the company, which is usually reticent to share viewership data. Out of the 5.0 million, global subscribers will comprise 4.35 million while United States subscribers will form the remaining 650,000.

Girl killed after surviving alleged drunk driving crash in Detroit
After the girl's dad crashed and was unconscious, the girl grabbed her belongings and left the vehicle, Shaw said in the video. She then texted 911 saying she needed help, which MI state police said is "the same as a 911 call".

Hastings said the company would make adjustments to account for foreign exchange rates in order to "steadily" increase operating margins.

"The quarter is a reminder that Netflix's cadence of net adds is not linear, but lumpy in nature", said Justin Patterson, an analyst with Raymond James and Associates in San Francisco, while pointing to the absence of a new hit series as a driver. This is isn't entirely surprising given rising competition in the video streaming market, where Amazon, Hulu, HBO and others are gaining share of subscription video dollars at Netflix's expense. The company has said it plans to spend $14 billion on shows and movies this year. "There has never been a better time to be a creator or consumer of content".

Netflix cited an array of competitors, starting with YouTube. Apple Inc., meanwhile, is spending more than $1 billion on original programming.

At the same time, cable distributors are offering smaller and cheaper bundles of channels.

"Our strategy is to simply keep improving", Netflix said.

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