Weak quarterly figures at Netflix
Author: Mario Schmidtgen
Stock falls in late trading
The online streaming service Netflix has a weak second quarter. In addition to low user growth, sales and perspective also fell short of expectations. This was shown on Monday after the market close on the annual report of the California Company. The investors responded promptly and so the stock dropped in the meantime over 14 percent.
Own expectations not reached
Netflix admitted that they had not achieved their goals: “We had a strong but not an outstanding quarter”. In particular, the subscription numbers were below expectations. From April to June, 670,000 new users registered in the US, 4.47 million internationally. Analysts and Netflix themselves had estimated the number significantly higher. In the half of the year, Netflix reached around 130 million users.
The forecast for the current quarter is also not particularly optimistic. Previously, analysts expected 6.3 million users. Netflix now estimates the number at five million. In addition, sales also failed to meet expectations: in the last quarter, sales increased by 40 percent in annual comparison to $ 3.9 billion.
Investors react on the stock market
Despite the increase in profits from the previous year with $ 65.6 million to $ 384.3 million at the end of this half-year, Wall Street was far from satisfied. Netflix has always been one of the high-flyers on the stock market, since the beginning of the year the share price has more than doubled. Some analysts expected a correction, as investors tend to take profits and sell the stock after a turnaround.
Billions of investment to cut out competition
In just a few years, Netflix has grown from a pioneer in streaming to a giant in the entertainment industry, stirring up the film industry and classic cable providers. Big players like Disney and Comcast, but also the mobile radio giant AT & T want to be involved in online TV acquisitions.
To keep the competition at bay, Netflix is investing billions. In the quarterly report, Netflix released a maximum of $ 8 billion in new TV productions this year. With this investment, Netflix is way ahead of the rivals Amazon, Hulu or HBO. But Disney wants to follow with its own streaming service. Netflix is prepared for other competitors, but the market offers “enough space for multiple parties”.