Netflix plunges 14% after it misses expectations on revenue and subscriber additions

Cornelia Mascio
Luglio 17, 2018

Revenue in the three months ended in June rose to $3.9 billion, yielding earnings per share of 88 cents.

Netflix reported Q2 revenue of $3.91 billion, up 40% year over year, and earnings per share of 85 cents (versus 15 cents in the year-ago quarter). Analysts were looking for 79.4 cents a share. Earnings grew 32 percent from past year to $384 million, or 85 cents per share.

In the third quarter, Netflix expects to add 5 million subscribers - 650,000 in the USA and 4.35 million internationally.

The California-based company added 670,000 net subscribers in the USA, far below the 1.19 million net additions expected by analysts polled by Thomson Reuters. That's compared with analyst estimates that Netflix would have Q3 net adds of 947,000 in the US and 5.05 million internationally.

The burn is all part of Netflix's heavy investment in original content and top Hollywood talent.

"We had a strong but not stellar Q2, ending with 130 million memberships", Netflix said in a letter to shareholders. The company will spend as much as $8 billion on programming this year. "Internet video is growing globally and we are fortunate to be one of the leaders".

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. "In addition to succeeding commercially, we are starting to lead artistically in some categories, with our creators earning enough Emmy nominations this year to collectively break HBO's wonderful 17-year run".

It marked the first time in a more than a year that Netflix hadn't exceeded its subscriber growth projections.

Netflix is was up 108% this year ahead of its second-quarter results.

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