[ad_1]
Investors have not wasted time after Netflix Inc.
NFLX, + 3.98%
announced that it was surpassing the earnings forecast for the third quarter on Tuesday afternoon, boosting the giant's share of streaming to 12%.
Netflix announced a total of 6.96 million net subscribers in the last quarter, of which 1.09 million came from the United States and 5.87 million from overseas, far exceeding the consensus of 5.32 million established by FactSet and the 5 million provided by the company. Netflix missed expectations of growth in the number of subscribers in the last quarter, which plunged the action into a vertiginous drop.
"One of the big questions after missing out on the revenue and the number of members in Q2 was to know if it was just an aberration or a sign of some kind." 39, weakening of the business, "said Jim Nail, Forrester's senior analyst. "These figures show that it was clearly an aberration."
Net earnings for the third quarter were $ 403 million, or 89 cents per share, compared to $ 129.6 million, or 29 cents per share, in the same quarter last year. The FactSet consensus for the third quarter was 68 cents per share. Revenues reached $ 4 billion, exceeding the FactSet consensus of $ 3.99 billion, up 25 percent from $ 2.99 billion a year earlier.
Netflix is forecasting sunny days for the fourth quarter, showing total net additions of $ 9.4 million and net additions paid of $ 7.6 million, increases of 13% and 15%, respectively, over the same period of the year. Last year.
The company's fourth-quarter list of originals includes the last season of "House of Cards" and the debut of "Chilling Adventures of Sabrina", inspired by Archie Comics' character Sabrina the Teenage Witch. Netflix plans to continue its aggressive spending on the original content, estimating that its free cash flow will rise to about $ 3 billion negative for 2018.
"Our growing range of self-generated content, which requires us to fund content during the production phase prior to publication on Netflix, is the primary driver of our working capital requirements, creating a gap between our positive net income and our free cash flow. deficit, "wrote the company's executives in a letter to shareholders.
Some analysts worry about the aggressive use of debt by Netflix to fund its free cash flow deficits, especially against a backdrop of rising interest rates. However, for the moment, it seems that most investors are not worried about negative free cash flow as long as the number of subscribers will keep up. grow.
For troubled investors, the streaming giant also explained why it continued to spend so much on content.
"We want to maximize the size of our membership base and people have very varied tastes that we seek to satisfy," says the letter. "It also reduces our dependence on each title. Even our biggest titles, which are viewed by tens of millions of our members, represent only a small percentage to a figure of the total number of hours of streaming. "
Netflix has recognized the rise of content competitors such as AT & T Inc.
T + 0.09%
WarnerMedia and the Walt Disney Co.
DIS + 2.42%
as well as high tech companies like Apple Inc.
AAPL, + 2.20%
and Amazon.com, Inc.
AMZN, + 3.35%
.
"Among these huge competitors on both sides, as well as traditional media companies, our job is to make sure that Netflix stands out so that consumers, when they have free time, choose to spend it with our service. The company writes.
The Netflix stock was still feeling the effects of the post-profit drop in the last quarter, having fallen by 13.5% in the last three months. The S & P 500 index
SPX, + 2.15%
gained 0.4% during this period.
Source link
