Netflix the world’s largest paid video service added 4.95 million new customers last quarter, slightly less than the 5.49 million analysts were expecting. It’ll make up some of that in the current period, with a forecast for viewer growth that beat analysts’ forecasts. This sent Netflix stock lower after the announcement but has gained some of its price back.
Netflix needs to add millions of subscribers every quarter to pay for the billions of dollars they are spends on Netflix Original TV shows and movies or licensing programs from others. Netflix has committed $15.3 billion for movies and TV shows over the next five years, hasn’t given any indication it plans to slow on its spending and said Monday it plans to raise money this quarter by issuing long-term debt.
During the 1st quarter 2017 Netflix released 17 stand-up specials, nine feature films and a long list of original series for kids and adults, but the lack of a massive hit like “House of Cards” is blamed for its slower-than-projected viewer growth. (13 Reasons Why was released in the 2nd quarter 2017 not the 1st quarter.)
Netflix has lined up a long list of high-profile releases in the coming months, including new seasons of “House of Cards,” “Orange Is the New Black” and “Master of None.”
The heavy second-quarter schedule comes with costs and highlights a dilemma. Because of those expenses, Netflix said profit in the period will be 15 cents a share, short of analysts’ estimate of 23 cents. Revenue will be $2.75 billion, versus Wall Street projections of $2.76 billion. The first quarter, lighter on new releases, was the company’s most profitable ever and the first time international operations made money.
Yet in the end of the day for cord cutters this is good news. With almost 5 million new subscribers Netflix is well placed to continue producing high end original programming. Making streaming the only place you can find some of the best new shows and movies.
Source: Investor’s Business Daily
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