Despite an overall healthy earnings report, Netflix’s stock saw a steep nosedive–falling as much as 5%. This was likely because the company provided a less-than-ideal outlook for its next quarter’s performance. The stock now seems to be recovering and is only down by a little more than 1% in after-hours trading.
Here are the important numbers:
- Netflix’s Q1 revenue hit $4.8 billion, beating Wall Street expectations of $4.5 billion.
- The company saw 76¢ earning-per-share, compared to 58¢ estimates.
- Netflix added 9.6 million subscribers this past quarter, exceeding Wall Street expectations of 8.94 million.
Even with these three big beats, the stock slightly stumbled once the numbers were released. In its letter to shareholder, Netflix said it expected to add only 5 million new subscribers next quarter. This is likely what prompted Wall Street’s tepid response.
Competition is only mounting for the streaming giant. Despite being the leader in the industry, companies like Disney are setting up their own streaming services, which very likely will have an impact on Netflix’s growth. Indeed, when Disney announced the details about its upcoming Disney+ service, Netflix’s stock tumbled.
While it seems the company was able to keep apace this past quarter, the company’s own estimates indicate that things may be slowing down.
We’ll learn more about what’s in store for Netflix after its earnings call later today. Stay tuned.
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