Netflix shares on track for worst day in five months

Apr 19, 2017, 01:37
Netflix shares on track for worst day in five months

The stock fell 3.47 percent to $142.15, losing momentum after touching a record high in extended trade on Monday following its results, the first March-quarter report from a major USA technology company.

"Netflix ended 1Q:17 with 98.75mm subscribers and noted it expects to eclipse the 100mm subscriber mark this weekend, giving the company around 40% of its expected quarterly net adds in just three weeks".

Shares of the company closed down over 2 percent at $143.36 per share on Tuesday.

Although Netflix is far from a one trick pony, the move of House of Cards from Q1 to Q2 has impacted on operating margins, which rose to 9.7% in the first quarter. Mostly to make its movies eligible for Oscar nominations, Netflix has had to partner with luxury theaters like iPic on limited theatrical releases instead.

The service added almost 5 million subscribers during the first three months of the year, and will end March with 98.7 million customers in roughly 190 countries.

United changes policy, crew can't displace seated passengers
Total fuel expense for the quarter equaled $1.56 billion, 28% compared with $1.22 billion in the same quarter a year ago . Crew members are now required to make must-ride bookings at least 60 minutes prior to departure.

In turn the number of net additions have fallen; Netflix now expects to have 8.15 million net adds, compared to 8.42 million net adds in the first half previous year. Global net additions were down from 5.1 million in the previous quarter to 3.5 million.

About 51 million of Netflix's subscribers are in the U.S. By the end of this year, Piper Jaffray analyst Michael Olson expects the majority of the company's subscribers to be overseas. Analysts are forecasting net income of $477.2 million, or $1.09 a share, on revenue of $11.2 billion, based on the average of estimates compiled by Bloomberg. Streaming revenue rose nearly 40 percent year-on-year to United States dollars 2.516 billion.

The inclination has presented Netflix with more rivalry in the contest for home entertainment budgets.

Netflix came up short of its subscriber forecasts for this quarter, but the SVOD says the slower growth early in 2017 isn't cause for concern.

"We have high satisfaction and are rapidly growing in Latin America, Europe, and North America", the company said in a letter to investors. Netflix said it will spend $1 billion marketing in 2017 to bring more attention to its shows. It is also seeking to improve content offerings to match local tastes in Asia, the Middle East and Africa but expects this to take time.