finance

Netflix shares tumble after worse than expected subscriber sign-up figures



The remarkable Netflix shares performance has come to an end after its subscriber sign-up figures came in well below analysts’ forecasts.

The video streaming business added a net 5.2 million subscribers in the second quarter – down on the 6.2 million that the company had predicted three months ago.

This brought an end to a run, which had seen the value of Netflix shares double so far this year – it added more than $40 billion in market value since the results in April.

The miss on subscribers marks the biggest disappointment for the company in two years and saw its shares tumbling by 14 per cent in after hours trading.

The drop in share price followed a run in which Netflix had almost doubled its market capitalisation.

Investors have become nervous about the company’s prospects following increased competition from rival players such as Apple, Amazon and YouTube.

Other companies are also looking to doing video streaming themselves, including Disney, which is launching its own streaming service and stopping licensing programmes to Netflix.

In a letter to its shareholder, Netflix called it a “strong but not stellar quarter.”

The company reported $3.9bn in revenue, up 40 per cent on compared to Q2 2017.

Profits came in at $384.3m – almost six times the figures during the equivalent period a year ago.



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