Netflix shares on track for worst day in five months
- Author: Eleanor Harrison Apr 19, 2017,
Apr 19, 2017, 1:38
The video streaming company offered a better-than-expected subscriber forecast for the current quarter when it reported results Monday evening, saying it expects to add a combined 3.2 million customers domestically and internationally in the period.
Netflix says the opportunity ahead remains "gigantic" despite a slowdown in subscriber numbers, including worldwide markets. The shares rose less than 1 percent to $147.71 at 8:00 a.m.in NY before the official market open. The first quarter, lighter on new releases, was the company's most profitable ever and the first time global operations made money.
About 51 million of Netflix's subscribers are in the U.S. By the end of this year, Piper Jaffray analyst Michael Olson expects the majority of the company's subscribers to be overseas.
Netflix is on the verge of surpassing 100 million subscribers worldwide, which will be the testimonial of how much the video streaming service has shaped the entertainment landscape since its introduction a decade ago. It's hard to imagine that letting "consumer choose" would result in anything but an overwhelming majority of moviegoers opting to simply watch new release films on the service they're already paying (a much more reasonable fee) for.
Netflix's biggest success, "13 Reasons Why", debuted the last day of the first quarter.
Total revenues jumped to United States dollars 2.637 billion from 1.958 billion the year before and against the company's guidance of 2.5 billion. The Los Gatos, California, company earned $178 million on revenue of $2.6 billion in the first quarter. Streaming revenue rose nearly 40 percent year-on-year to United States dollars 2.516 billion. Netflix is now forecasting operating margin at 4.4% in Q2, placing it on track to reach its 7% target for the full year.
The trend has confronted Netflix with more competition in the battle for household entertainment budgets. Its stock rose $1.90 to $149.15 in Monday's extended trading, even though subscriber growth during the first quarter came in slightly below management forecasts.
Netflix noted rapid growth in Latin America, Europe and North America.
"Since the launch of The Ridiculous 6, Netflix members have spent more than half a billion hours enjoying the films of Adam Sandler", reads the earnings report.