Online-video streaming giant Netflix Inc. (NFLX), Tuesday reported a profit for the second-quarter that fell short of Wall Street view, despite revenues gaining nearly 20% and exceeding estimates.
Netflix added 1.54 million subscribers globally in the quarter, far above its forecast of 1.00 million, to end the quarter with 209.18 million subscribers. The company lost 0.43 million customers in the U.S. and Canada region during the quarter, while EMEA region subscriber additions were 0.19 million, LATAM were up 0.76 million and APAC rose 1.02 million.
“We finished the quarter with over 209 million paid memberships, slightly ahead of our forecast. COVID has created some lumpiness in our membership growth (higher growth in 2020, slower growth this year), which is working its way through,” Netflix said in a letter to investors.
For the third quarter, the company expects to add 3.50 million subscribers.
Netflix had witnessed a huge demand for its service during the pandemic period, with user growth surging in 2020. However, this has led to growth slowing down this year.
Los Gatos, California-based Netflix’s second-quarter profit rose to $1.35 billion or $2.97 per share from $720 million or $1.59 per share last year. On average, 35 analysts polled by Thomson Reuters expected earnings of $3.15 per share for the quarter.
Netflix’s revenues for the quarter rose 19.4% to $7.34 billion from $6.15 billion last year. Analysts had a consensus revenue estimate of $7.32 billion for the quarter.
Revenue growth was driven by an 11% increase in average paid streaming memberships and 8% growth in average revenue per membership.
Looking forward to the third quarter, Netflix expects revenues of $7.48 billion and earnings of $2.55 per share. Analysts polled by Thomson Reuters currently expect earnings of $2.17 per share and revenues of $7.48 billion.
NFLX closed Tuesday’s trading at $531.05, down $1.23 or 0.23%, on the Nasdaq. The stock further dropped $14.66 or 2.76% in the after-hours trade.
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