Netflix shares plunge as global growth falls short, U.S. customers shrink
By Lisa Richwine and Vibhuti Sharma (Reuters) - Netflix Inc said on Wednesday it lost U.S. streaming customers for the first time in eight years and missed targets for new subscribers overseas, an announcement that jarred investors ahead of looming competition.
By Lisa Richwine and Vibhuti Sharma
(Reuters) - Netflix Inc
Netflix shares were down nearly 12% in after-hours trading after the company posted quarterly results that showed it shed 130,000 U.S. customers.
The world's dominant subscription video service said it overestimated demand for new programming released from April to June and felt an impact from price increases in some markets.
Netflix reported that it added 2.83 million new paid streaming subscribers outside the United States, below analyst expectations of 4.8 million, according to IBES data from Refinitiv. Analysts had forecast a gain of 352,000 in the United States.
"Our missed forecast was across all regions, but slightly more so in regions with price increases," the company said a letter to shareholders.
"We think Q2's content slate drove less growth in paid adds than we anticipated," it said.
(Graphic - Netflix subscriber additions data, https://tmsnrt.rs/32HXJ2a)
(For an interactive graphic, click here: https://tmsnrt.rs/2XPFdGg)
Netflix has staked its future on global expansion and creating original TV shows, movies and documentaries to attract new customers and keep the existing ones paying monthly subscription fees.
"Even though we expected slowing user growth in the U.S., a negative paid net additions number is shocking," said Clement Thibault, analyst at financial markets platform Investing.com.
"The problem is that with intensifying competition, there is no guarantee Netflix has the pricing power needed to raise prices without massively bleeding users."
Netflix raised prices in Britain, Switzerland, Greece and Western Europe during the second quarter.
The last time Netflix lost U.S. subscribers was in 2011 following an uproar over a price hike and a plan to split its DVD-by-mail and streaming services.
Looking ahead, Netflix projected it will grow by 7 million paid streaming customers in the third quarter with help from a new season of supernatural thriller "Stranger Things," released on July 4. That is more bullish than the 6.6 million forecast from analysts polled by Refinitiv.
But looming in November is the launch of Disney+, seen as a formidable entrant into the streaming market, and original programming from Apple Inc
Netflix also faces the future loss of its two most-streamed shows. "The Office" will come off Netflix in January 2021 and head to Comcast's streaming platform, while "Friends" will end its run on Netflix at the beginning of 2020. It will move exclusively to the upcoming AT&T service HBO Max.
The company spent $7.5 billion on content for 2018 and executives have said that amount will grow in 2019. Its debt has tripled from 2016 to $10.36 billion in 2018.
Net income fell to $270.7 million, or 60 cents per share, in the second quarter ended June 30 from $384.3 million, or 85cents per share, a year earlier.
Total revenue rose to $4.92 billion from $3.91 billion.Analysts on average had expected revenue of $4.93 billion.
Netflix shares fell to $320.66 in after-hours trading after closing at $362.44 on the Nasdaq.
(Reporting by Lisa Richwine in Los Angeles and Vibhuti Sharma in Bengaluru; Editing by Anil D'Silva and Matthew Lewis)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Guinea president 'captured', govt dissolved, claim army putschists'; attack on presidential palace repulsed, say authorities
Reports suggest that they captured President Alpha Conde and dissolved the government, bust the ground situation remains unclear
NEW YORK (Reuters) -The price of cryptocurrencies plunged and crypto trading was delayed on Tuesday, a day in which El Salvador ran into snags as the first country to adopt bitcoin as legal tender. Shares of blockchain-related firms also fell as crypto stocks were hit by trading platform outages. But the major focus was on El Salvador, where the government had to temporarily unplug a digital wallet to cope with demand.
By Joseph White and Sanjana Shivdas (Reuters) -The head of Apple Inc's car project, Doug Field, is going to work for Ford Motor Co to lead the automaker's advanced technology and embedded systems efforts, a hiring coup for Ford Chief Executive Jim Farley.