Netflix stock falls on soft forecast, heightened competition

Netflix Inc. on Tuesday reported a bump in revenue and global net additions, but offered a soft outlook for the current quarter, sending shares slightly lower in extended trading.

The fourth-quarter results, announced after the market’s close, sent Netflix shares

NFLX, -0.46%

 down 1.5% in after-hours trading.

In a letter to shareholders, Netflix executives noted, “For Q1’20, we forecast global paid net adds of 7.0m vs. 9.6m in Q1’19, which was an all-time high in quarterly paid net adds. Our Q1’20 forecast reflects the continued, slightly elevated churn levels we are seeing in the US plus an expectation for more balanced paid net adds across Q1 and Q2 this year.”

The Silicon Valley company reported the addition of 8.76 million paid subscribers globally in the fourth quarter, far short of what Wall Street and the company expected. Analysts were looking for global paid streaming subscriber additions of 7.9 million, according to FactSet, on domestic additions of 623,000 and 7.2 million internationally. Netflix reported 8.84 million new paid streaming subscribers in the year-ago quarter.

But it offered a first-quarter revenue outlook of $5.73 billion, which is on par with FactSet estimates, and global paid subscriber additions of 7 million vs. the 8.9 million forecast by FactSet, indicating that it faces heightened competition.

Netflix faces competition from some of the world’s biggest media companies: Apple Inc.’s

AAPL, -0.68%

 Apple TV+, Walt Disney Co.’s

DIS, -0.53%

 Disney+, Inc.’s

AMZN, +1.46%

 Amazon Prime Video, and Viacom Inc.’s

VIAB, +0.00%

 CBS All Access. Last week, Comcast Corp.

CMCSA, -0.42%

 unpacked Peacock, due in April for Comcast customers and July for everyone else. AT&T Inc.

T, +0.36%

 is expected to launch HBO Max in May.

See also: Netflix earnings should show fallout from new streaming rivals, preparations for more

Netflix reported fourth-quarter net income of $587 million, or earnings of $1.30 a share, compared with $134 million, or 30 cents a share, in the year-ago period. Revenue grew 30% to $5.47 billion from $4.2 billion in the year-ago period. Analysts surveyed by FactSet had estimated 52 cents a share on revenue of $5.45 billion.

Netflix stock is flat over the past 12 months, with the S&P 500 index

SPX, -0.27%

 gaining 24%.

Source link

Free Course

"Double Your Traffic in 30 days" + Secret Bonus

valued at $299

This amazing course will teach you, step by step, how to double if not triple your traffic over the next 30 days.

100% Privacy. We will never spam you!