Netflix plunges as subscriber growth disappoints

Roman Schwartz
July 17, 2018

Netflix stock is now in a free fall in after-hours trading.

The streaming company said it had added 5.2 million subscribers in the three months to June 30, below analyst forecasts for 6.3 million subscribers and its own expectations.

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 worldwide business.

The company reported quarterly revenue of $3.91 billion and earnings per share of 85 cents.

Almost $23 billion was wiped off the value of Netflix last night after it missed subscriber growth and revenue forecasts for the second quarter.

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Analysts had expected 79 cents on revenue of $3.94 billion.

"This isn't entirely surprising given rising competition in the video streaming market, where Amazon, Hulu, HBO and others are gaining share of subscription video dollars at Netflix's expense", he added.

Netflix has been paying up big time for its content. Netflix said Monday that it expects content expenses to hit $8 billion this year.

Netflix has spent billions of dollars on original content, backing films or shows from creators from a gamut of countries and cultures as it strives for broad appeal as a global television service.

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