Netflix stock drops ahead of quarterly earnings report

Netflix added about 3.20 million subscribers internationally in the third quarter higher than the 2.01 million average analyst estimate
Netflix added about 3.20 million subscribers internationally in the third quarter higher than the 2.01 million average analyst estimate
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18 October, 2016

Netflix also posted $0.12 earnings per share - versus Wall Street expectations of $0.06 per share - on $2.29 billion in revenue, up 36 percent over this time past year.

In the third quarter, Netflix added 3.57 million new streaming video subscribers, vs. its forecast for 2.3 million. During regular trading, the stock was down 1.65% to 1.67%.

Q3 USA subscriber growth (net additions): 370,000 versus Wall Street forecasts 304,000 compared to Netflix guidance of 300,000.

Monday's disclosure that it had added 3.57 million streaming subscribers in the most recent period comes a quarter after it reported the weakest subscriber expansion in two years. Netflix now has 86.7 members around the world, versus expectations of 85.5 million.

The streaming video company chalked up its better-than-expected performance to "excitement around Netflix original content".

The culprit was pretty much what we'd expected: people are getting excited about its new original content - and that might be enough to entice global consumers eagerly waiting to watch it and catching up on everything else int he mean time.

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Internationally, Netflix pointed out its localization efforts in both Poland and Turkey, which Wall Street analysts suggested was spurring interest in the service over the last few weeks.

The net additional were bigger than expected worldwide, but less than forecast in the U.S.by Wall Street. The company says it will generate more than 1,000 hours of "premium original programming" next year, up from 600 hours this year.

Without that, despite expanding widely into new countries, it's going to have trouble convincing people to shell out money for the service.

Overall, Netflix reported a profit of $51.5 million, or 12 cents a share, compared with $29.4 million, or 7 cents a share, a year earlier.

With today's report, however, the company has reversed pretty much all of the losses it's incurred in the past 10 months.


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