Netflix Q3 Earnings, Subscriber Additions Miss Estimates
Netflix Inc. (NFLX), Tuesday reported a third-quarter profit that fell short of Wall Street estimates, despite revenues increasing 23% and beating expectations. The online-video streaming giant’s subscriber additions were below outlook, sending its shares down 6% in the extended trading session.
Netflix added 2.20 million subscribers globally in the quarter, lower than its forecast of 2.5 million, to end the quarter with 195.15 million subscribers. The company added 0.18 million customers in the U.S. and Canada region during the quarter, while EMEA region subscriber additions were 0.76 million, LATAM were 0.26 million and APAC were 1.01 million.
Commenting on the lower subscriber additions, the company said, “We think this is primarily due to our record first half results and the pull-forward effect we described in our April and July letters.”
For the fourth quarter, the company expects to add 6.00 million subscribers.
Los Gatos, California-based Netflix’s third-quarter profit rose to $790 million or $1.74 per share from $665 million or $1.47 per share last year. On average, 38 analysts polled by Thomson Reuters expected earnings of $2.13 per share for the quarter.
Netflix’s revenues for the quarter rose 22.7% to $6.44 billion from $5.25 billion last year. Analysts had a consensus revenue estimate of $6.38 billion for the quarter.
The video-streaming service provider said average paid streaming memberships rose 25% and ARPU increased 1.6% year over year.
Looking forward to the fourth quarter, Netflix expects revenues of $6.57 billion and earnings of $1.35 per share. Analysts polled by Thomson Reuters currently expect earnings of $0.94 per share and revenues of $6.58 billion.
NFLX closed Tuesday’s trading at $525.42, down $5.30 or 1.00%, on the Nasdaq. The stock further dropped $27.72 or 5.28% in the after-hours trading.
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