Netflix forecast disappoints as streaming competition looms
By Lisa Richwine and Vibhuti Sharma (Reuters) - Netflix Inc reported quarterly results on Tuesday that beat Wall Street targets, but the world's largest online streaming service predicted it would hook fewer new customers than expected through June, just as Walt Disney Co and others prepare to escalate the streaming video wars. Shares of Netflix traded down about 1 percent at $355.02 after-the-bell, paring losses following a deeper sell-off just after the results were released.
By Lisa Richwine and Vibhuti Sharma
(Reuters) - Netflix Inc reported quarterly results on Tuesday that beat Wall Street targets, but the world's largest online streaming service predicted it would hook fewer new customers than expected through June, just as Walt Disney Co and others prepare to escalate the streaming video wars.
Shares of Netflix traded down about 1 percent at $355.02 after-the-bell, paring losses following a deeper sell-off just after the results were released.
Netflix predicted it would pick up 5 million new streaming subscribers from April through June. That was below the 5.48 million consensus of industry analysts surveyed by FactSet.
"What's making investors nervous is that there are signs of a slowdown in the second-quarter subscriber growth," said Haris Anwar, senior analyst at Investing.com. "This is made all the more prominent by the looming threat of competition from Disney and Apple."
From January through March, Netflix reported it added 7.86 million paid subscribers internationally, compared with the average analyst estimate of 7.14 million, according to IBES data from Refinitiv.
The company said it signed up 1.74 million paid subscribers in the United States in the quarter, above the average analyst estimate of about 1.57 million, according to IBES data from Refinitiv.
The quarter included the debut of original dramas "Sex Education" and "Russian Doll," and the company raised prices in the United States, Mexico and Brazil.
Netflix is spending billions to attract new customers while Disney, AT&T Inc's WarnerMedia, Apple Inc and Comcast Corp plan to launch streaming competitors.
Disney is viewed as one of the strongest rivals thanks to a broad portfolio of franchises popular with children - from Mickey Mouse to Marvel and Star Wars - and a brand trusted by parents. Last week, Disney priced its service at $7 per month, just over half the $13 price for Netflix's most U.S. popular plan. The Disney+ service will launch in November.
Disney is leading a shift among traditional media companies that had been selling programming to Netflix for years. Now, many have decided to keep their content for their own services as Netflix and another tech giant, Amazon.com Inc, continue to lure new customers to streaming.
Netflix spent $7.5 billion on TV shows and movies for 2018, and executives have said that amount will grow in 2019. The aggressive spending has led to a tripling of the company's debt in two years, to $10.36 billion in 2018, from $3.36 billion in 2016.
For the first quarter, Netflix said its net income rose to $344.1 million, or 76 cents per share, from $290.1 million, or 64 cents per share, a year earlier. Analysts on average were expecting 57 cents per share.
Total revenue rose to $4.52 billion from $3.70 billion. Analysts on average had expected revenue of $4.50 billion.
(Reporting by Lisa Richwine in Los Angeles and Vibhuti Sharma in Bengaluru; Editing by Arun Koyyur and Leslie Adler)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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