Netflix Shares Plunge After Big Miss on Subscriber Growth
*By Kavitha Shastry*
Shares of Netflix plunged after hours Wednesday, after badly missing expectations for global subscriber growth in the second quarter. The company also posted a surprise drop in U.S. users.
In a letter to shareholders, the streaming giant attributed the weak performance to price increases that began rolling out earlier this year and a relative dearth of new content. It also pointed out particularly strong growth in the first quarter.
The company tried to brush off concerns that increased competition had an impact, saying, "There wasn’t a material change in the competitive landscape during Q2, and competitive intensity and our penetration is varied across regions."
Netflix said it expects to return to a more normal rate of growth in the back half of the year. The third season of "Stranger Things" debuted a few days after the end of the second quarter, and the final run of "Orange Is the New Black" hits the service next week.
But analysts have raised concerns over the looming loss of its most popular titles, "The Office" and "Friends," which will exclusively be offered on rival services in the next few years.
Netflix profit came in slightly better than expected, at $0.60 a share versus analyst expectations for $0.56, but revenues of $4.92 billion fell just short of estimates.
The company added 2.8 million users internationally — Netflix previously said it expected to gain 4.7 million customers. And some analysts had predicted up to 5.3 million new subscribers. In the United States, Netflix shed 126,000 members.
For the current quarter, it expects to add 7 million customers globally, with 800,000 in the U.S.
Shares were down more than 10 percent after hours, but even with the drop, Netflix shares are up about 20 percent this year.
About 780,000 pressure washers sold at retailers like Home Depot are being recalled across the U.S. and Canada, due to a projectile hazard that has resulted in fractures and other injuries among some consumers.
President Donald Trump has fired one of two Democratic members of the U.S. Surface Transportation Board to break a 2-2 tie ahead of the board considering the largest railroad merger ever proposed.
Ford is recalling more than 355,000 of its pickup trucks across the U.S. because of an instrument panel display failure that’s resulted in critical information, like warning lights and vehicle speed, not showing up on the dashboard.
The Rev. Al Sharpton is set to lead a protest march on Wall Street to urge corporate America to resist the Trump administration’s campaign to roll back diversity, equity and inclusion initiatives. The New York civil rights leader will join clergy, labor and community leaders Thursday in a demonstration through Manhattan’s Financial District that’s timed with the anniversary of the Civil Rights-era March on Washington in 1963. Sharpton called DEI the “civil rights fight of our generation." He and other Black leaders have called for boycotting American retailers that scaled backed policies and programs aimed at bolstering diversity and reducing discrimination in their ranks.
President Donald Trump's administration last month awarded a $1.2 billion contract to build and operate what's expected to become the nation’s largest immigration detention complex to a tiny Virginia firm with no experience running correction facilities.
