Wall Street Reacts to Netflix Numbers as Shares Slide

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Netflix shares dropped 14.11 per cent to US$343.97 in after-market trade, in a setback to the television juggernaut operating in some 190 markets around the world.

Netflix's stock price continued to slide, a sign investors are anxious the video-streaming service's faltering subscriber growth could augur a broader slowdown.

The company also tempered its third-quarter projections, saying it will bring in 5 million subscribers globallyーdown from 5.3 million, the bulk from outside the U.S. Second-quarter revenue was $3.91 billion, which was slightly lower than the $3.94 billion predicted by analysts.

With all this, the stock is tanking.

While the misses seem minuscule for a company with more than 125 million global subscribers, they could validate investors' fears of a company in slowdown mode for the first time in years.

Paul Verna, eMarketer principal analyst, commented: "After four consecutive quarters of beating its own guidance, and analysts' expectations on key metrics such as revenues, profits, and subscriber gains, Netflix disappointed with a weak Q2 2018".

Netflix admitted it had overestimated its second quarter subscription growth after consistently undershooting the numbers previously.

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Total revenue for the period was $3.91bn (£2.9bn), at a yearly growth of 40.3 per cent. Analysts had expected revenue of $3.94bn.

Total streaming revenue for Q2 18 is US$3,814 million, up from US$2,671 million during the same period past year.

Netflix missed its subscriber growth targets by about a million subscribers in the three months ending in June, sparking concern among investors that there might be a saturation limit for the streaming platform.

Netflix has been investing a significant amount of cash in content creation and is expected to spend up to $8 billion this year on original programming.

We were honored last week with the most Emmy nominations of any network.

Netflix said Monday that it expects more competition, but dismissed any potential negative impact on its business.

In the letter to shareholders, Netflix said it expected more competition from worldwide players including ProSiebenSat 1 Media in Germany and on-demand service Salto in France. Walt Disney plans to launch a rival streaming service in 2019. "Our strategy is to simply keep improving, as we've been doing every year in the past".

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