Roughly 3.98 million people signed up for Netflix from January
through March, below the 6.25 million average projection of analysts surveyed
by Refinitiv.
Netflix estimated it will add just 1 million new streaming
customers in the second quarter. Analysts had expected a forecast of nearly 4.8
million.
Shares of Netflix sunk 11% in after-hours trading to
$489.28, wiping $25 billion off the company's market capitalization. Its stock
has risen 27% over the past 12 months compared with a 63% increase in the
tech-heavy Nasdaq Composite Index.
Netflix said it did not believe competition changed
materially in the quarter or impacted its new sign-ups "as the
over-forecast was across all of our regions."
The company projected membership growth would accelerate in
the second half of the year when it releases new seasons of "You,"
"Money Heist," and "The Witcher" and action movie "Red
Notice," among other titles.
A year ago, Netflix added a record 15.8 million customers as
the pandemic forced people around the world to stay home. The company said on
Tuesday the pandemic hindered filming new shows.
"These dynamics are also contributing to a lighter
content slate in the first half of 2021, and hence, we believe slower
membership growth," the company said in its quarterly letter to
shareholders.
Analysts project people will spend less time streaming from
their living rooms as COVID-19 vaccinations spread and more people emerge from
their homes.
Rival media companies have declared streaming their priority
and are spending billions to compete with Netflix. Walt Disney Co's Disney+
crossed 100 million subscribers in March. Netflix's total streaming customers
stood at 207.6 million at the end of March.
Netflix's share of new U.S. subscribers fell to 8.5% during
the quarter, down from 16.2% the same period a year ago, according to Kantar
Media.
During the quarter, Netflix lost one of its most popular
titles when workplace comedy "The Office" moved to Comcast Corp
streaming service Peacock.
Netflix also raised its monthly rates in Britain, Germany,
Argentina and Japan during the quarter.
New customers totaled 1.8 million in Europe, 1.36 million in
Asia and 360,000 in Latin America.
"What wasn't expected was the strength of the slowdown
in international markets, where competition is significantly lower," said
eMarketer analyst Eric Haggstrom.
Excluding items, the company earned $3.75 per share in the
first quarter, beating analyst estimates of $2.97 per share.
Revenue rose to $7.16 billion from $5.77 billion during the
quarter, edging past estimates of $7.13 billion.
Net income rose to $1.71 billion, or $3.75 per share, from
$709 million, or $1.57 per share, a year earlier.
0 comments:
Post a Comment