Netflix Stock Falls 20% On Slower Subscriber Growth| MENAFN.COM

Tuesday, 17 May 2022 03:07 GMT

Netflix Stock Falls 20% On Slower Subscriber Growth


(MENAFN- Baystreet.ca) Netflix Stock Falls 20% On Slower Subscriber Growth

Streaming giant Netflix's (NFLX) stock is down 20% in premarket trading after the company warned of slowing subscriber growth when announcing its latest quarterly earnings.

Netflix said it expects to add just 2.5 million subscribers this quarter, a number that falls short of Wall Street's estimates and would mark the slowest start to a new year for the company in a decade.

Shares of Netflix fell as much as 20% to $406.12 U.S. in after-hours trading, erasing about $45 billion U.S. in market value as investors adjust to a new era of slower growth for the company.

Netflix said it added just 18.2 million customers in 2021, down 50% from the record year before when people were locked down with the pandemic.

The company is forecasting that the slowdown will continue, at least for another quarter, with the outlook for the current period missing Wall Street's projection for 6.26 million new subscribers.

Netflix reiterated its confidence in the long-term prospects for its business but said growth“has not yet re-accelerated to pre-COVID levels.”

The company ended last year with two strong quarters. Netflix signed up 8.28 million customers in the fourth quarter of 2021, beating Wall Street estimates, though shy of its own forecast of 8.5 million subscribers.

Europe and Asia were Netflix's most important markets in 2021. The company added 7.14 million customers in Asia and 7.34 million in Europe, Middle East and Africa.

In the fourth quarter, Netflix's earnings per share (EPS) came in at $1.33 U.S. pared to $0.82 U.S. expected by analysts. The company's Q4 revenue matched the $7.71 billion expected by Wall Street.

Netflix announced last week that it is raising prices for its monthly subscriptions in the U.S. and Canada as its subscriber growth plateaus in the North American market.

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