Netflix Tanks After Earnings Miss

By Staff of Admiral Markets

Access To Financial Markets Made Easy • Jul 17, 2020 at 7:51 AM EDT

Shares of Netflix fell sharply after the online streaming company reported a second-quarter earnings fall last night, that came in well below expectations.

Shares of Netflix (NFLX) fell sharply after the online streaming company reported a second-quarter earnings fall last night, that came in well below expectations. While the company also reported a surge in users due to people staying at home through the lockdown, the guidance on new subscribers was less than half what analysts expected.

Netflix stock tumbles

The share price of Netflix dropped nearly 10% on the release of the report. Did you know you can speculate on Netflix's share price using Contracts for Difference (CFDs) which allows you to potentially profit from both rising and falling markets? Get started with a free demo trading account today!

Here are the key numbers from Netflix's earnings report:

Earnings per share (EPS): $1.59 vs $1.81 expected
Q2 revenue: $6.15 billion vs $6.08 billion expected
Q2 subscribers: 10.09 million vs 8.26 million

Interestingly, the miss in earnings was largely due to a one-time charge related to tax credits in California. Even though second-quarter revenue and subscribers beat analyst expectations, which now stand at 192.95 million subscribers globally, investors were more concerned about the low forward guidance.

The company announced it expects to add just 2.5 million paid subscribers in the third-quarter which was less than half the 5.27 million expected. Fortunately, its launch for original shows and movies this year is still intact due to the long content production lead times. However, 2021 will have fewer series launches due to the halt in production this year.

Netflix also announced that Ted Sarandos was promoted to the co-CEO role.

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