Netflix shares plummet after company reveals disappointing subscriber growth

Jeannie Matthews
July 17, 2018

Netflix (NFLX) missed expectations on its subscription numbers when it reported earnings on Monday, with total streaming adds of 5.14 million versus analysts' expectations of 6.27 million.

"We had a strong but not stellar Q2 (second quarter)", Netflix said in a letter to shareholders. "This Q2, we over-forecasted global net additions... as acquisition growth was slightly lower than we projected". In second quarter a year ago, Netflix posted $2.79 billion in sales. Analysts were expecting 6.3 million - 1.2 million in the U.S. and 5.1 million internationally, according to Bloomberg. "As we head into the rest of 2018, we believe Netflix has a number of growth levers which should fuel the company's next phase of strategic penetration among both USA and especially worldwide consumers despite some softness seen in 2Q", he wrote.

Today Netflix reported their 2nd quarter 2018 numbers. The company has said it plans to spend $14 billion on shows and movies this year.

The online streaming giant's shares have soared 115pc since the start of the year, helping it leapfrog Disney to become the most valuable media company in the world.

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Still, Netflix ended Q2 with 130.1 million global subs, up 25% year over year, with 56 million in the USA and 72.8 million elsewhere.

Netflix's explosive growth may be starting to plateau.

The company's stock had previously surged almost 146% over the last 12 months, driven by strong revenues and consistently higher-than-expected subscriber growth.

The Silicon Valley based company noted that it is beginning to "lead artistically" in some categories with its original content, earning enough Emmy nominations this year to break a 17-year top-spot streak by HBO.

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