Netflix lowers revenue forecast for 2019 first quarter, shares slump

Netflix lowers revenue forecast for 2019 first quarter, shares slump

Netflix lowers revenue forecast for 2019 first quarter, shares slump

Top that off with an additional 1.5 million domestic subscribers that joined the service, and the company gained a total of 8.8 million subscribers in the quarter.

Netflix, which raised prices for most USA subscribers by $1 to $2 a month earlier this week, said net income fell to $133.9 million, or 30 cents a share, from $185.5 million, or 41 cents, a year earlier.

Earnings per Share came in at 30 cents when the results were posted at Thursday's closing bell, compared to the 24 cents forecast by economists.

It's natural that Netflix will find it harder to find new customers for its service, now that a majority of USA households with fast internet access already subscribe and prices are rising. The company projects it will add 8.9 million subscribers worldwide at the end of the first quarter.

"Bird Box", "You" and other new programs attracted millions more subscribers to the streaming service, but that wasn't enough. Now the understandable fear is empowered entertainment and technology companies such as Walt Disney Co, Apple Inc and AT&T's media division coming to offer Netflix-like streaming-video services. Revenues registered at $4.19 billion, down from the $4.21 billion forecast.

This marks the fourth time that Netflix has raised its us prices; the last hike came in late 2017.

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Netflix announced Thursday that it has 139 million subscribers around the world, adding almost nine million new paid subscribers during the last three months of 2018.

According to its earnings release, Netflix added 7.3 million global paid subscribers during the quarter, well above the 6.1 million subscribers Wall Street had expected. The letter also notes that when YouTube went down globally for a few minutes in October, Netflix's viewing and signups spiked for that time.

According to Bloomberg data, the average price target for Netflix now stands at $396, up from $384 on Thursday.

Netflix is expected to spend up to $13 billion on new TV shows and movies to satisfy its massive user base.

This is all well and good but it does beg the question of how much longer Netflix can sustain itself without an advertising model, with the likes of Prime Video and NowTV making up ground quickly. Views of Netflix content are only counted if an account watches 70 percent of a show or movie, according to the company. The incredible subscription growth clearly justifies hiking membership prices in the US. But it gave some limited figures in its fourth-quarter earnings report yesterday, in which it reported slightly lower-than-expected quarterly revenues. Analysts surveyed by Bloomberg overwhelmingly rate the stock a "buy", and carry an average price target of $395 per share - around 16% higher from where the stock was trading on Friday.

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