Netflix shares down almost 9%
Streaming giant Netflix disappointed investors on its revenue.
Earnings per share came in at $3.29, better than the $2.83 anticipated and even though it added 5.9 million subscribers between April and June, investors were a lot more interested in sales. Revenue rose to $8.19 billion - missing expectations of $8.27bln with forecasts also disappointing. While the company added subscribers, it said average revenue per member fell 3% from a year earlier. That was partly because many of the new sign-ups came in countries where Netflix charges lower prices.
(Video Transcript)
Netflix shares
The streaming giant ended with shares down almost 9% in sessions on the IGTV platform last night, even though earnings per share came in at 3.29. Better than the 283 expected, even though the streaming giant added 5.9 million subscribers between April and June. Investors were a lot more interested in the top-line revenue rising to $8.19 billion, but that missed expectations of $8.27 billion.
Revenue forecasts
Revenue forecasts are also disappointing at Netflix. The forecast third-quarter revenue would hit $8.5 billion. Wall Street had been forecasting 8.7 billion, and that, I think, is the reason why, when you look at this chart, you see that big red candle on the right-hand side, which is where this all-session stock ended out yesterday's trade. This stock will be down around seven percent or 8% at the start of today's session in the States.
While the company added subscribers, it said the average revenue per member fell 3% from this time last year. That was partly because many of the new signups came from countries where Netflix charges low prices. Netflix said it's an advertising tier. That lower charging tier remained a small part of its membership base. The current ad revenue was not material, but the stock was down heavily and extended trade last night on the platform.
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