Netflix Doubles Growth Estimates But Misses Earnings Expectations

Netflix NFLX doubled Wall Street's expectations for the first quarter, acquiring 15.77 million new subscribers worldwide. Social distancing has indeed done wonders for boosting its subscriber growth, as this is the most subscribers ever gained in a single period. 

Earnings of $1.57 per share were below the estimates of $1.64 earnings per share. Revenue for the quarter amounted to $5.77 billion, slightly surpassing Wall Street expectations of $5.74 billion and its own forecast of $5.73 billion. A rise in the U.S. dollar consequently dragged on its international revenue growth, which has been a major area of focus for the company. More than half of its revenue during the period came from outside the U.S. and Canada.

Q2 Forecasts

As for the estimate of global paid subscriber growth, paid net additions are estimated to reach 7.5 million. The company's revenue estimate of $6.05 billion is higher than Wall Street's estimate of $5.96 billion. As for earnings per share (GAAP), they are forecasted at $1.81 whereas Wall Street estimates $1.55.

But do these really matter as much? Despite achieving its strongest-ever quarter for subscriber growth, Netflix warned that the current global crisis makes it difficult to predict the future. Just like Walt Disney Co DIS and Roku ROKU, the company is hampered by an inability to produce new content while the nation is under lockdown.

COVID-19 has demolished tourism, theme parks, motion picture releases, TV and movie productions, and more. The list of those companies fighting for dear life is endless. Netflix surely is a rare bright spot, not just in the media sector but overall economy. But considering the appeal of Disney+ that resulted in more than 50 million subscribers in only five months, along with other rivals like Comcast CMCSA and AT&T's T HBO Max upping their game, the future is promised to no one, especially in a recession or what many fear, a depression that could be ahead of us.

This article is not a press release and is contributed by Ivana Popovic who is a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure  Ivana Popovic does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you're interested in becoming an IAM journalist contact: contributors@iamnewswire.com Questions about this release can be sent to ivana@iamnewswire.com

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