|
 Netflix said it expected to add about 500,000 customers in the
United States in the second quarter that ends in June, compared with
Wall Street targets of 586,000, according to FactSet StreetAccount.
The forecast includes a "modest impact" from the beginning of a
price increase for its monthly movie and TV subscription service,
the company said.
The company known for its original shows including "Orange is the
New Black" and "House of Cards" said it expected to add about 2
million subscribers in markets outside the United States, versus
analyst expectations of 3.5 million, according to FactSet. It also
reported results for the first quarter, when subscriptions outpaced
its own target.
Netflix is prone to large stock price swings as investors bet on the
possible success of its mission to redefine television viewing
around the world.
The company's long-term results depend in large part on how fast and
profitably it expands. Netflix has launched in almost every country
in the world, at a substantial cost, and now faces the task of
adapting the service to different markets and cultures as
competitors also rush in.
In January, Netflix went live in more than 130 countries, a huge
global push by Chief Executive Reed Hastings to counter slowing
growth in the United States.
Initial sign-ups were limited in some countries because the service
at this point offers only English-language content and does not
accept all of the local payment options, Hastings said on Monday.
"Over the next couple years as we further localize, we'll be able to
see more opportunity," Hastings told analysts on a conference
call.Netflix has not yet launched in China, where it has been
exploring an entry for some time. It said on Monday it was
"continuing discussions" and that "whatever we do," the Chinese
market would have only a modest financial effect near-term.
The company previously promised "material" global profit in 2017 as
it begins to reap the benefits of its costly expansion. A
spokeswoman said Netflix is sticking with that forecast.
"I think that people who relied on unbridled international growth
are beginning to have second thoughts, and the company now faces
domestic competition that may limit its ability to grow domestic
profitability," said Wedbush Securities analyst Michael Pachter, who
has an "underperform" rating on the stock.
[to top of second column] |
Amazon.com Inc announced it would offer its video streaming service
as a standalone monthly subscription as it looks to drive membership
in its Prime subscription service.
Netflix said its forecast for fewer international additions than the
prior year was due to tough comparisons with the year-ago period
when it had launched in Australia and New Zealand.
The company will start boosting rates for more than half of its U.S.
members from May.
"We are rolling this out slowly over the year, rather than mostly in
May, so we can learn as we go," the company said in a statement.
Netflix also said it expected to increase its spending on movie and
TV content from about $5 billion in 2016 to more than $6 billion in
2017.
From January through March, Netflix added 6.7 million subscribers,
bringing its worldwide total to 81.5 million.
Net income for the quarter was $28 million. Earnings per share came
in at 6 cents, beating the forecast of 5 cents from analysts
surveyed by Thomson Reuters I/B/E/S.
Over the past year, Netflix stock had risen more than 60 percent,
making it the No. 3 performer on the S&P 500.
The company's shares were down 8 percent at $99.70 in after-hours
trading on Monday.
(Reporting by Anya George Tharakan in Bengaluru and Lisa Richwine in
Los Angeles; Editing by Savio D'Souza and Matthew Lewis)
[© 2016 Thomson Reuters. All rights
reserved.] Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
