Netflix misses subscriber target, but firm outlook helps shares higher
Apr 19 2017
Netflixreported revenue of $2.64 billion, in line with analyst forecasts, and earnings of 40 cents per share (versus Wall Street estimates of EPS of 38 cents).
Looking forward to the second quarter, Netflixexpects to add 3.20 million memberships, with 0.60 million in the US and 2.60 million internationally. Wall Street expects the company to add a total of 5.3M subscribers, compared to 7.1M subscriber additions in Q4 2016 and 6.7M subscriber additions in Q1 2016.
Streaming video pioneer Netflix Inc ended the first quarter with fewer customers than Wall Street expected but issued a bullish forecast on the number of new subscribers it expects by mid-year, in a positive sign for its big worldwide expansion.The company pushed back the next season of its defining hit, "House of Cards", and other programming to the second quarter, which should boost the number of new subscribers in that period, Netflix said.
Shares of SAP SE (NYSE:SAP) traded down 1.19% during midday trading on Friday, hitting $96.18. The company's revenue for the quarter was up 35.9% compared to the same quarter previous year.
Netflix total number of subscribers grew by 21.2 percent to 98.75 million compared to the analysts' expectation for the additions of subscribers to be 98.93 million.
Also note the continued superior membership growth in the worldwide segment. We are making good strides in improving our content offering to match local tastes in Asia, Middle East, and Africa, but have much progress to make, like in Latin America a few years ago. The first quarter should come in a bit above that full-year target, due to the timing of content production schedules. Revenue growth appears stable. Most importantly, management continues to see a long runway ahead for revenue and earnings growth. In the letter, the firm specifically addressed Amazon's (AMZN) move into the NFL. Movie and TV studios typically also demand more money as more people subscribe to channels to in an effort to make as much as possible off their content. As domestic growth slows, global growth has been a greater focus for many analysts. "The plan there really is to draw subscribers to the service with content that Netflix builds and produces on its own, and that Netflix owns and doesn't have to pay royalties on".
The NFLX results are solid. He also says the business is likely to suffer because they don't have a solid fan base for their show. That is impressive, especially for a company getting knocked for spending too much. I think it is important to realize that as NFLX matures, they are carefully picking the areas of the market they want to focus their time and effort. It now has almost 99 million subscribers. The service is not looking just to rebroadcast live television, or take the place of cable.
I'm content to stick with my large Netflix holdings and pull up a chair for the report. The stock had a trading volume of 16,364,743 shares. The firm has a market cap of $63.38 billion, a price-to-earnings ratio of 342.44 and a beta of 1.27. That does not go lower can only go higher. (NFLX) could bring EPS of $0.13/share. Barton Investment Management owns 699,928 shares or 28.82% of their U.S. portfolio. Upon request the advisor will provide a list of all recommendation made during the past twelve months.