Netflix shares plunge as subscriber growth stalls
July 17, 2018 -- Streaming video service leader Netflix saw its stock plummet after expected subscriber additions fell short in the second quarter of 2018. The streaming service added nearly 5.2 million new subscribers during the April-June period, more than 1 million short of the 6.2 million it had forecast.
It marked the first time in a more than a year that Netflix hadn't exceeded its subscriber growth projections. As of June 30, Netflix had 130 million subscribers, including 57.4 million in the U.S.
Despite its second-quarter misfire on subscriber growth, the company reported earnings that beat analyst estimates. Earnings grew 32 per cent from last year to $384 million, or 85 cents per share. Revenue climbed 6 per cent to $3.9 billion.
Bringing in more subscribers and money is vital for Netflix because it expects to keep spending more on exclusive TV shows and movies to try to stand out from rivals. The company will spend as much as $8 billion on programming this year.
Netflix is battling challenges from Amazon, Google's YouTube and Hulu in the video streaming market, and is likely to face even stiffer competition as other formidable rivals try to muscle in.
- NETFLIX Letter to shareholders, Jul 16, 2018
- Netflix drops dud on Wall St. as subscriber growth flops (AP)
- Netflix shares tank after big miss on subscriber growth (Reuters)
- Netflix shares plunge as subscriber growth stalls (BBC)
- Netflix shares down 14% on missed subscriber growth in second quarter (USA Today)