(LR) Reed Hastings and Ted Sarandos attend the world premiere of the Netflix TV series “Marseille” at the Palais du Pharo in Marseille on May 4, 2016 in Marseille, France.
Stephane Cardinale | Corbis | Getty Images
Netflix stock fell as much as 11% in over-the-counter trading after a large drop in subscriber numbers was reported in its earnings report for the first quarter. The company also expects to only gain around 1 million subscribers in the current quarter.
Here are the key numbers:
- Earnings per share (EPS): According to a refinitive poll of analysts, it is expected to be $ 3.75 versus $ 2.97
- Revenue: $ 7.16 billion versus $ 7.13 billion expected according to Refinitiv
- Globally paid net subscriber supplements: According to Factset, 3.98 million are expected versus 6.2 million
The company’s revenue rose 24% year over year and was in line with guidance for the beginning of the quarter, Netflix said. It also posted a sharp drop in profits compared to Street estimates.
“We believe paid membership growth has slowed due to the major withdrawal of Covid-19 in 2020 and lighter content in the first half due to delays in the production of Covid-19,” Netflix said in its letter the shareholders.
Netflix has continued to hold its own against a host of competitors including Disney’s Disney + and Hulu, AT & T’s HBO Max, Apple TV +, Amazon Prime, and Comcast NBCUniversals Peacock. The company said in its report that it doesn’t believe competition is a contributing factor to its poor subscriber numbers.
“We do not believe that the level of competition changed significantly or was a major contributor to variance in the quarter as the over-forecast was in all of our regions,” the report said.
Netflix also expects content to pick up again later this year due to production delays caused by the Covid-19 pandemic.
“As mentioned earlier, the production delays of Covid-19 in 2020 will result in a plan for 2021 that is heavier weighted in the second half of the year and has a large number of returning franchises,” the company said.
Netflix has approved a buyback program to repurchase up to $ 5 billion worth of common stock starting in 2021 with no set expiration date. This is expected to begin in the quarter, the company announced.
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