Netflix failed to comply with new user estimates in the first quarter – El Financiero

Netflix failed to comply with new user estimates in the first quarter – El Financiero

rise of Netflix The company enjoyed during the pandemic and was largely halted on Tuesday, when falling subscriber growth drove its shares down by as much as 13 percent.

The live streaming service added just 3.98 million subscribers in the first quarter, lower than Wall Street’s estimate of 6.29 million subscribers and its own forecast of 6 million subscribers. The current quarter will be tougher, after Netflix forecast 1 million new customers, a fraction of the 4.44 million analysts expected.

Netflix has been warning for months that growth will slow after customers exit quarantine for COVID, but few have expected it to stop drastically. The first quarter of 2020 was the strongest in the company’s history, with 15.8 million new customers, and Netflix’s pace was still surprisingly fast in the fourth quarter.

In contrast, the past three months were the slowest in the first quarter since 2013, when Netflix added nearly 3 million customers.

Netflix blamed the effect of a “COVID-19 hack” in 2020, which means the pandemic has increased its growth while everyone else is stuck at home and needing something to watch. Now that affects its 2021 results. The company said the lack of new programs also contributed to the decline. Unlike the previous quarter, Netflix wasn’t as successful as Bridgerton a Queen’s gambit.

Production problems

The company’s production slowed in the first quarter due to the fallout from the epidemic that caused production delays. Netflix was able to maintain its release schedule during the first months of the COVID blackout since it had already finished with many shows. But films and shows that were supposed to be in production in March, April and May had to be discontinued, causing the current shortage.

READ  "Phishing": How Serious Identity Theft Phone Fraud works

Netflix rejected the notion that competition played a role in its slowdown, stating that its growth has slowed worldwide. Disney +, HBO Max, and Peacock don’t compete with Netflix in many markets.

However, it faces more competitors than ever before, and some services are less expensive than Netflix, which raised its prices in the US in October.

Better way

Although slowing down, Netflix It is in the strongest financial center in its history. It reported net income of $ 1.71 billion, more than double what it was a year ago, and generated $ 692 million in free cash flow during the quarter.

While part of this is due to production restrictions, it also reflects a stronger foundation. The live streaming service is profitable in many new markets, such as South Korea.

Earnings were $ 3.75 per share in the fourth quarter, beating expectations of $ 2.98.

Netflix plans to reduce its debt and will buy back $ 5 billion of shares.

Europe remains a bright spot for Netflix. The streaming service added 1.81 million customers in Europe, the Middle East and Africa, leading the company. LupineFrench heist thriller, was the hottest new series of the quarter.

Netflix is ​​down to $ 480 in extended trading, which will be the lowest in 2021. The stock is up 1.6 percent this year, starting from Tuesday’s close in New York.

Zoe Marsh

 "Avid internet practitioner. Bacon fanatic. Zombie advocate. Tv lover. Beer geek. Alcohol fanatic."

Leave a Reply

Your email address will not be published. Required fields are marked *

Previous Post Karol G and Anuel AA confirm the end of their relationship after nearly three years together
Next Post PayPal subsidiary Wenmo is also beginning to allow the use of cryptocurrencies