Published: Tue, July 17, 2018
Money | By Ralph Mccoy

Stock Tanks on Weak Subscriber Adds — Netflix Earnings

Stock Tanks on Weak Subscriber Adds — Netflix Earnings

Netflix's stock got hammered after the bell after reporting that it added far fewer subscribers in the second quarter than Wall Street was expecting - and warned of another subscriber shortfall to come in the third quarter.

Revenue: $3.91 billion. Analysts were expecting $3.94 billion. In second quarter past year, Netflix posted $2.79 billion in sales.

Netflix said it made a profit of $384m on revenue of $3.9 billion in the recent quarter, compared to net income of $66m on $2.8bn in revenue in the same period a year ago.

However, the shares suffered a 4pc sell-off on Friday ahead of its second quarter figures amid concerns that it will not be able to continue expanding at recent rates as rival streaming services beef up their own content. In the second quarter of 2017, it earned 15 cents a share.

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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. Analysts surveyed by Zacks had expected revenue of $4.14 billion. Worldwide Netflix added 4.47 million subscribers below the 5 million predicted. The company said its free cash flow (FVF) was negative $559 million for the period. Over the previous eight quarters, the company has on average topped its total net subscriber addition guidance by about 1 million, with three-quarters of that coming from global markets, according to Wedbush Securities analyst Michael Pachter.

"We had a strong but not stellar Q2 (second quarter)", Netflix said in a letter to shareholders. "Internet video is growing globally and we are fortunate to be one of the leaders".

The results broke Netflix's two-year streak of over-delivering on subscriber growth.

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