Netflix shares soar as subscriber growth misses forecasts

The spectacular rebound in Netflix's stock market stopped on Monday after reporting a million fewer subscribers than expected.

The video streaming company added 5.2 million net subscribers in the second quarter, instead of the 6.2 million that its leaders had planned three months ago. He admitted that his performance was "strong but not stellar".

Netflix missed targets both in the United States, where subscribers increased by 0.7 m, and abroad, up 4.5 m, bringing the total number of its members at 130.1 m.

Until Monday night, Netflix's share price had more than doubled so far this year, including adding more than $ 40 billion of market capitalization since the results of the forecast campaign.

The absence of Monday on subscribers is his biggest disappointment in two years, and he has dropped his stock by as much as 14 percent after hours. Investors have cleared more than $ 20 billion of its valuation in minutes, fearing that the growth spurt of the past year does not go away.

Netflix's outlook for the third quarter was also more conservative than Wall Street had anticipated. It predicted 135.1 million members by the end of September. Its forecast of net net subscriber additions of 5.0 million this quarter is less than the 5.3 million euros added in the same quarter a year ago.

With recent price increases and currency fluctuations, Netflix's revenues were broadly in line with expectations at $ 3.9 billion, as was net income of $ 384 million. He expects revenues to reach $ 4.0 billion in the next quarter, slightly less than Wall Street's consensus of $ 4.1 billion, and forecasts net income of $ 307 million.

Netflix, in its quarterly shareholder letter, attributed its own internal forecasts to disappointment, rather than any change in demand for its services. Over the last four quarters, Netflix has significantly beat its own subscriber forecasts.

The last quarter included new seasons from Netflix's popular original shows such as Jessica Jones and Glow while the next quarter should see the return of long-time hits of Cartes and Orange is the New Black .

Netflix touted his strong performance in last week's Emmy nominations, when he received the most nominations from any company or studio, ending the 17-year dominance of HBO.

The Netflix awards firm can inflate cost of billions of dollars in content spending a year. Despite slowing subscriber growth, the Silicon Valley media and technology group gave no indication that it would reduce its planned content budget by $ 8 billion this year.

Netflix still anticipates free cash outflows of up to $ 4 billion for 2018, adding that it would continue to fund its debt-based content expenditures rather than exploit the markets of # 39; s shares.

The executives insisted that it is essential to invest in new movies and television series to attract and retain subscribers, especially as Walt Disney, YouTube, Amazon, Apple and the new AT & T compete with both talent and viewers. and Time Warner, which owns HBO.

Monday's report gave no indication that Netflix was changing its approach.

"We believe that consumers' appetite for quality content is vast and that there is room for more parties to have attractive offers," Netflix said. "Our strategy is simply to continue to improve, as we do every year in the past."

The company is increasingly looking for new markets around the world to support its growth. Earlier this month, he published Sacred Games his first original series in India.

"Having swept Street's expectations on submarines in recent years, this is a net slowdown for Netflix," said Daniel Ives, an analyst at GBH Insights. "The international lack was the most worrying since it is the cornerstone of the base growth thesis for years to come."