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.
The heated hearing began with recorded testimony from kids and parents talking about being exploited on social media. Throughout the hours-long event, parents who lost children to suicide silently held up pictures of their dead kids.
Adtalem CEO Steve Beard addresses a report from Safkhet Capital taking the short position on the for-profit education giant, plus why he believes there should be financial recourse for student loan borrowers misled by their institutions.
CEO of Americares Christine Squires shares how the organization is helping provide medical assistance in a time of increasing instability, war, and climate-related disaster.
Doug Clinton, Deepwater Asset Management managing partner, shares tips for investors looking to take advantage of the massive boom in artificial intelligence beyond Microsoft and Nvidia.
Jason Moser, analyst and adviser at the Motley Fool, shares thoughts on recent tech earnings, including what’s behind Google’s share price drop and why A.I. could be Microsoft’s ‘iPhone moment.’
CEOs of social media platforms like Facebook, TikTok, and more meet with lawmakers Wednesday about how they are protecting children from sexual exploitation.
San Francisco 49ers president Al Guido discusses what goes into preparing for Super Bowl LVIII, building a championship-ready team, and how Taylor Swift and streaming are both bringing new fans to the NFL.
A $1 billion loss from a six-week strike did not crash GM's net income last year, which instead rose 12% — and the automaker expects improvement in 2024, too.
