Earnings Results: Netflix misses on subscriber growth and earnings forecast, but stock recovers on ad plans, password-sharing crackdown

by | Apr 18, 2023 | Stock Market

Netflix Inc.’s stock initially plunged in after-hours trading Tuesday, after the streaming giant posted weaker subscriber growth and forecast a smaller profit than Wall Street expected. But shares later erased most of their losses on company disclosures that its new ad-supported service is a success and its crackdown on shared accounts in the U.S. is coming this quarter. Netflix
reported that subscribers increased by 1.75 million in the first quarter of the year, missing analysts’ average estimate of 2.2 million. Netflix reported fiscal first-quarter net earnings of $1.31 billion, or $2.88 a share, compared with $3.53 a share in the year-ago quarter.

Revenue improved to $8.16 billion from $7.87 billion a year ago. Analysts surveyed by FactSet had expected on average net earnings of $2.86 a share on revenue of $8.18 billion. For the second quarter, Netflix executives guided for earnings of $2.84 a share on $8.24 billion in revenue, while analysts on average were expecting earnings of $3.07 a share on sales of $8.18 billion. Netflix no longer provides guidance on subscriber additions, a sign its years of rapid growth are clearly cooling. Also see: As the original Netflix dies, a new era of ads and password crackdowns is born Shares plunged 10% lower, below $300, in after-hours trading immediately following the release of the results, after closing the regular session with a 0.3% increase at $333.70. After briefly crossing into positive territory, shares ended the extended session down just 0.2%. In their first video earnings call without company co-founder and former CEO Reed Hastings, Netflix’s executive team c …

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