Netflix shares soar as it announces 6.96m new members

Brenda Watkins
October 17, 2018

Netflix Inc hooked 7 million new streaming subscribers from July to September, a third more than Wall Street had expected, reassuring investors who had anxious the company was facing a slowdown in its fast-paced growth.

Earnings jumped to 89 cents per share, well above a projected 68 cents.

Shares have surged more than two-thirds this year and closed on Tuesday at $346.40 in NY, valuing the company at nearly $154bn. Said eMarketer media analyst Paul Verna.

The streaming company released a record 676 hours of original programming in the third quarter, according to Cowen & Co, the first time it has exceeded 500 hours in any quarter.

Netflix also plans on hiring another 30 or so employees in its Mumbai offices, Netflix Chief Talent Officer Jennifer Neal told the Times of India earlier this month.

That paid off in terms of new subscribers.

Fans blast Piers Morgan for mocking Daniel Craig's parenting
Then came the unsolicited commentary from Morgan , who said wearing a baby carrier is emasculating. Craig's wife, the actress Rachel Weisz , reportedly gave birth to a daughter in August.

The company added 7 million subscribers in the September, exceeding its conservative forecast for 5 million net additions to the service in the third quarter.

The company exceeded forecasts in both USA and global markets. It now has some 137 million subscribers worldwide. Analysts were expecting 4.8 million - 600,000 in the USA and 4.2 million internationally, according to Nomura Instinet.

In a letter to shareholders, Netflix said it saw "strong growth broadly across all our markets including Asia". Nor does the company release viewership figures for programs, contending that its subscriber growth demonstrates the popularity of its entertainment slate.

Earnings per share: $0.89. The company anticipates adding another 9.4 million subscribers during the fourth quarter, up 13% compared with the 8.3 million it added a year ago. "However, given Netflix's longtime leadership and extensive content library, competitors will be hard-pressed to build streaming businesses that can aspire to become market leaders". It's affordable, there aren't any commercial breaks and it has a deep and diverse library of TV shows and movies. It has issued a net $7.5 billion of bonds in less than three years, though that could carry a cost in a changing economic environment. Netflix is set to lose television perennial Friends, a crown jewel in their streaming library, in 2019. It cut its projection of negative cash flow to closer to $3 billion. Revenue expanded 2.4 percent, to $4 billion.

The firm has said it plans to spend as much as $8bn on content this year, with more than a quarter devoted to original programming.

Better-than-expected growth in the third quarter will keep that narrative alive, while another miss will probably prompt a major sell-off.

Other reports by

Discuss This Article