Netflix Inc. (NFLX, Financial) released its first-quarter results after the market closed on April 20. The company's earnings and revenue surpassed projections despite a slowdown in subscriber additions after witnessing outpaced subscriber growth in the previous quarter.
The company's shares plunged 11% in after-hours trading to $489.28 following the earnings release as it missed subscriber growth targets for the quarter.
Performance
The company posted diluted earnings per share of $3.75, which reflected a growth of 139% from the year-ago quarter. Revenue of $7.16 billion climbed 24.2% on a year-over-year basis. Wall Street was anticipating earnings of $2.97 per share on $7.13 billion in revenue.
On the global front, the company added 3.98 million paid subscribers during the quarter, which is less than its own guidance of 6.2 million paid subscriber additions. The company further broke down the numbers to 1.36 million subscriber additions in Asia Pacific, 0.36 million in Latin America, 1.81 million in Europe, the Middle East and Africa and 0.45 million in the U.S. and Canada. Currently, the company has 207.64 million subscribers globally.
Throughout 2020, the company added a record 37 million paid subscribers. This was a 31% increase over subscriber additions of 28 million in 2019.
Road ahead
Netflix said that the pandemic did not have much of an impact on its slate of content overall. However, the production did slow things down, and it postponed its big titles toward the end of 2021. Netflix projects that the total count of originals will be more in 2021 compared with 2020. It plans to include other movies and shows that it acquired in addition to its original content.
Netflix is facing stiff competition from other media companies like Disney's (DIS, Financial) Disney+ and AT&T's (T, Financial) HBO Max as they have started streaming movies, television shows and other content. The company, however, said it will not focus on its competitors and will stick to its strategy of trying to improve its service and content every quarter faster than its peers.
For the second quarter of 2021, Netflix expects revenue of $7.3 billion, which is below analysts' estimates of $7.39 billion. Earnings for the same period are projected to be $3.16 per share versus $2.68 expected by outsiders. The net subscriber additions are anticipated to be just 1 million in the second quarter, while analysts are projecting the figure to be 4.44 million.
Disclosure: I do not hold any positions in the stocks mentioned.
Read more here:
- Procter & Gamble Reports 3rd-Quarter Results
- Coca-Cola Outpaces 1st-Quarter Earnings amd Revenue Estimates
- Kroger Bets Big on Robots to Take on Walmart and Amazon
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
