(LR) Reed Hastings and Ted Sarandos attend the world premiere of the Netflix TV series “Marseille” at Palais Du Pharo in Marseille on May 4, 2016 in Marseille, France.
Stephane Cardinale | Corbis | Getty Images
Netflix shares were down a whopping 11% in non-business hours trading after reporting a large missed subscriber numbers in the first quarter earnings report. The company also said it expects to add about 1 million subscribers in the current quarter.
Here are the key figures:
- Earnings per share (EPS): $ 3.75, versus $ 2.97 expected, according to an analyst survey from Refinitiv
- Revenue: $ 7.16 billion, versus $ 7.13 billion expected, according to Refinitiv
- Global Additions to Paid Net Subscribers: 3.98 million versus 6.2 million expected, according to Factset
“We believe that growth in paid membership has slowed due to the major withdrawal of Covid-19 in 2020 and a lighter table of contents in the first half of this year due to delays in production of Covid-19”, Netflix said in its letter to shareholders.
Netflix continues to stand up to a host of competitors, including Disney’s Disney + and Hulu, AT & T’s HBO Max, Apple TV +, Amazon Prime, and Comcast NBCUniversal’s Peacock. The company said in its report that it does not believe competition played a role in the weak subscriber base.
“We do not believe competition intensity has changed materially in the quarter or was a material factor in variance as the over-forecast was across all of our regions,” the report said.
Netflix also expects content to pick up again later in the year, following production delays due to the Covid-19 pandemic.
“As we noted earlier, Covid-19’s production delays in 2020 will lead to a 2021 slate weighed more heavily in the second half with a host of returning franchises,” the company said.
The company said production is back on track in almost all of its major markets. If it stays that way, Netflix says it expects to spend more than $ 17 billion on content this year.
The company’s revenue grew 24% year over year and was in line with the forecast for the start of the quarter, Netflix said. It also provided a strong profit margin when compared to Street estimates.
Netflix also approved a buyback program to buy back up to $ 5 billion in common stock, starting in 2021 with no fixed expiration date. That’s expected to start with the quarter, the company said.
This story evolves. Please check again for updates.
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