Netflix Q4 results: shares down after earnings revenue miss
Netflix stock is down in afterhours US trading after a worse-than-expected earnings report.
Netflix stock is down in US after hours trading after a disappointing fourth quarter (Q4) earnings report. Netflix results are less than what Wall Street expected.
Netflix earnings: key figures
| Earnings per share (EPS) | $0.30 |
| Revenue | $4.19 billion |
| Net income | $133.9 million |
| Free Cash Flow | -$1.3 billion |
| Subscriber growth | 8.8 million |
Netflix earnings
Netflix earnings per share (EPS) were up and beat estimates at $0.30, better than the $0.24 financial experts predicted. Even though earnings were up for Netflix Q4 results, the number is down 66% from Q3. Netflix revenue disappointed investors, with Netflix profits at $4.19 billion. That's less than the $4.21 billion financial analysts wanted from the tech company.
Netflix earnings are down, but subscriber numbers are up internationally. The streaming service added 7.31 million subscribers outside the US. The company is enjoying success outside the US with content from India and critically acclaimed Mexican movies like Roma.
In the US, Netflix subscriber numbers were smaller, with 1.5 million new US customers. Though there were fewer subscribers, millions of the existing customers watched original movies like Birdbox.
Netflix spent billions of dollars on new content, so Netflix Q4 results were down and there was a negative $1.3 billion cash flow for the corporation. The company is continuing to spend money to fund more programming. Before Netflix Q4 earnings, the corporation raised prices for US subscribers. Cowen analyst, John Blackridge, noted that the price increase was for the purpose of drawing in new subscribers with content.
'Netflix utilizes occasional price hikes to fund an unprecedented wave of original content growth,' noted Blackridge.
What do Netflix Q4 results mean for their share price?
Netflix share price is down in after hours trading in the US market after a worse-than-expected Netflix earnings report. it remains to be seen if this is a minor setback or if investors will be scared into a mass selloff after the Netflix revenue report. Netflix stock was still high after increasing prices, so Netflix share price may rebound.
How do Netflix Q4 results compare to other tech stocks?
Compared to other tech stocks like Amazon and Google, the streaming company's stock has been lower. Netflix revenue being down could impact its shares in the future and drive it lower than other tech stocks.
What is the Netflix dividend forecast?
The streaming company predicts that Netflix revenue will increase in Q1 to $4.49 billion, less than the expected $4.6 billion expected. The corporation also predicted EPS of $0.56, much less than the $0.85 financial experts hoped for in the future.
Despite the lackluster report about Netflix revenue, many banks like Goldman Sachs think that Netflix can withstand any stock volatility that may be caused by its price increases.
'While any price increase, particularly one this significant, is likely to be met with increased churn, we believe the value Netflix offers subscribers and the strong content slate in the year ahead will largely offset that,' noted Goldman Sachs.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
See an opportunity to trade?
Go long or short on more than 17,000 markets with IG.
Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.
Live prices on most popular markets
- Forex
- Shares
- Indices
