Netflix quarterly report shows that it’s new subscribers in the first quarter were only 60% of its expectations. Thus Netflix shares fell 10%.
According to the Netflix earnings report released after the closing of the New York Stock Exchange on the 20th, Netflix had 3.98 million new subscribers in the first quarter of this year. It is accounting for only 64 percent of the 6.2 million expected by financial information company FactSet. As of the end of March, the number of subscribers stood at 28 million. It fell short of its own estimate of 210 million. Netflix expects the number of new subscribers to fall further to 1 million in the second quarter.
Netflix stated that this is because video content production has plummeted due to the pandemic. Initially, the number of subscribers was expected to increase significantly due to the pandemic. But fewer subscribers than expected subscribed as the supply of content decreased.
This trend is significantly lower than last year. Netflix had 16 million new subscribers in the first quarter of last year, and 37 million new subscribers last year. Paolo Pescatore, an analyst at PP Foresight, said the “COVID-19 effect” enjoyed by video streaming companies was “definitely over.”
As the number of new subscribers fell below expectations, Netflix shares retreated nearly 10% on the day, trading at $501 in the after-hours market. The closing price was $549.57. Shortly after the earnings came out, the stock price also fell behind by more than 12 percent.
