Internet television network Netflix (NFLX) late Tuesday easily beat its target for new subscribers in the first quarter. Netflix earnings and sales also topped views in the March quarter.
However, its outlook for new subscribers in the June quarter missed estimates. Netflix forecast adding 5 million streaming video subscribers in the second quarter. Wall Street predicted 5.4 million.
In the first quarter, the subscription video-on-demand leader added 9.6 million new paying subscribers. It forecast 8.9 million at the start of the quarter. Wall Street was looking for 9.4 million. Netflix ended the March quarter with 148.9 million streaming video subscribers worldwide.
Netflix earned 76 cents a share on sales of $4.52 billion in the first quarter. Analysts expected it to earn 57 cents a share on sales of $4.5 billion. On a year-over-year basis, Netflix earnings rose 19% and sales climbed 22%.
Netflix Earnings Target Comes Up Short For Q2
Netflix expects to earn 55 cents a share on sales of $4.93 billion in the second quarter, it said in a letter to shareholders. Wall Street was modeling 99 cents in earnings per share on sales of $4.95 billion. In the year-earlier period, Netflix earned 85 cents a share on sales of $3.91 billion.
The company boasted about a “strong slate” of content coming in the second half of the year. That content includes new seasons of popular series “Stranger Things,” “13 Reasons Why,” “Orange Is the New Black,” “The Crown” and “Money Heist.” Plus, it has big-budget original films coming such as Michael Bay’s “Six Underground” and Martin Scorsese’s “The Irishman.”
Netflix said it has seen minimal impact so far from a series of price increases in the U.S., Brazil, Mexico and parts of Europe.
Rival Services From Apple, Disney Loom
Apple announced its Apple TV+ service on March 25. It will include original shows from directors J.J. Abrams, M. Night Shyamalan and Steven Spielberg. Other creative stars working on Apple TV+ shows include actors Jennifer Aniston, Jason Momoa and Reese Witherspoon.
Disney detailed its Disney+ service on April 11. It will feature a massive catalog of Disney, Pixar, Marvel, Star Wars, Fox and National Geographic content as well as original shows. Disney priced the service at $6.99 a month, undercutting the Netflix starting price of $8.99.
Netflix Isn’t Worried About New Video Services
Netflix executives said they don’t expect the new entrants to slow the company’s growth.
“We don’t anticipate that these new entrants will materially affect our growth because the transition from linear to on-demand entertainment is so massive and because of the differing nature of our content offerings,” the company said. “There is vast demand for watching great TV and movies, and Netflix only satisfies a small portion of that demand.”
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor companies.
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