Netflix Falls On Q4 Earnings Results: Here's Why And What Investors Need To Know

Netflix Inc NFLX is selling off in Thursday's after-hours session after the company announced its fourth-quarter financial results and issued guidance below estimates.

What Happened: Netflix reported quarterly earnings of $1.33 per share, which beat the estimate of 82 cents per share. The company reported quarterly revenue of $7.71 billion, which came in slightly below estimates.

Operating margin came in at 8%, representing a six percentage point decrease year-over-year. The streaming giant said it ended the quarter with 222 million paid memberships after adding 8.3 million in the fourth quarter.

"We slightly over-forecasted paid net adds," Netflix said. The company reported 8.5 million net adds in the same quarter last year.

"Even in a world of uncertainty and increasing competition, we’re optimistic about our long-term growth prospects as streaming supplants linear entertainment around the world," Netflix said.

See Also: Why Netflix Stock Could Plummet Unless Bulls Step In Following Q4 Earnings

What's Next: The stock may be under pressure as a result of the company's weak guidance. 

Netflix said it expects first-quarter earnings of $2.86 per share, which is well below the estimate of $3.45 per share. The company expects first-quarter revenue of $7.903 billion versus the estimate of $8.08 billion.

Netflix acknowledged that increased competition may be affecting its marginal growth, but reaffirmed its confidence in the company's long-term growth strategy.

"We continue to manage our business for the long term and under the belief that pleasing our members will lead to strong value creation for our fellow shareholders."

NFLX Price Action: Netflix is making new 52-week lows in Thursday's after-hours session. The stock was down 18.1% in after-hours trading at $416.38.