Netflix Falls Short of Q2 Subscriber Expectations Worldwide, Stock Dives

Netflix Falls Short of Q2 Subscriber Expectations Worldwide, Stock Dives

Netflix Falls Short of Q2 Subscriber Expectations Worldwide, Stock Dives

Netflix says its faulty forecasting caused it to miss its target for new subscribers, falling short by more than a million even as it reported quarterly earnings that beat analysts' expectations.

Last night it was revealed in NY, that Netflix added 5.2 million users in the second quarter, about a million fewer than the company predicted.

Netflix's latest earnings report shows signs of stagnation: the streaming giant added 5.2 million subscribers during its second quarter this year, the same amount it gained a year earlier.

Netflix, which is up 108% this year, reported new 5.15 million subscribers, whereas it had projected 6.2 million and Wall Street anticipated 6.34 million, according to estimates.

Netflix had an average of 124.4 million paying subscribers in the quarter, up from 118.9 million in the first quarter but below its guidance of 125 million.

Total revenue for the period was $3.91bn (£2.9bn), at a yearly growth of 40.3 per cent. Analysts had expected revenue of $3.94bn. Worldwide Netflix added 4.47 million subscribers below the 5 million predicted.

In a letter to shareholders, Netflix called its second-quarter performance "strong but not stellar".

Netflix is facing growing competition from global tech rivals and traditional providers
Image Netflix is facing growing competition from global tech rivals and traditional providers

That comes out to 4.87 million new subscribers for the quarter, far below the 6.2 million Netflix was hoping for. Netflix now has 130 million total subscribers, with more than half coming from outside the U.S.

Calling the quarter "strong but not stellar", Netflix boss Reed Hastings cited hurdles such as increased competition from YouTube, HBO, Disney, Amazon and Apple, as well as foreign currency fluctuations as the streaming giants accelerates its global business.

Netflix's stock price continued to slide, a sign investors are anxious the video-streaming service's faltering subscriber growth could augur a broader slowdown.

We were honored last week with the most Emmy nominations of any network.

But it also faces growing competition.

AT&T just bought Time Warner for $81 billion in a deal that includes HBO - a pay TV and video streaming service that AT&T plans to expand in an attempt to lure more viewers away from Netflix.

He added the expectation that despite the weaker-than-expected results, the company was expected to continue to be the leading video streaming service across the US. "Our strategy is to simply keep improving, as we've been doing every year in the past".

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