Netflix stock rises after Q2 earnings show content like 'Stranger Things' helped stem the loss of subscribers
Staff Writers & Associated Press
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Netflix stock rose Wednesday after the streaming-media giant reported it lost only half as many subscribers in the second quarter than it expected, and as it forecast a rebound in coming months.
Its shares were up 1% at $203.66 at last check, after putting on 7% in premarket trading as traders absorbed its quarterly earnings report released Tuesday after the bell.
In its financial update, Netflix said it shed 970,000 subscribers in the three months to June 30, beating analysts' expectations for a 2 million drop forecast by the company itself earlier this year. It now has 220.67 million users worldwide.
But its second-quarter revenue came in lower than expected, rising 8.6% to $7.97 billion, versus the $8.035 billion forecast.
Netflix was probably spared from deeper losses by the ongoing popularity of “Stranger Things," its science fiction/horror series that debuted in 2016. Following the release of the series' fourth season in late May, Netflix said, viewers watched a total of 1.3 billion hours of it over the next four weeks — more than any other English-language series in the service's history.
The less severe loss in subscribers, combined with an outlook calling for a return to growth in the July-September period. helped lift Netflix's battered stock by 7% in extended trading after the numbers came out.
Netflix co-CEO Reed Hastings didn't try to sugarcoat things during a Tuesday conference call about the results. “It's tough losing a million subscribers and calling it a success,” he said.
The company's April-June regression follows a loss of 200,000 subscribers during the first three months of the year, marking the first time Netflix’s subscriber totals have shrunk in consecutive quarters since its transition from offering DVD-by-mail rentals to video streaming began 15 years ago.
In April, Netflix announced it will crack down on the rampant sharing of subscriber passwords and take another step it once scorned by offering a less expensive tier of its service that will include commercial interruptions. Without providing further specifics, Netflix said Tuesday that both the ad-supported plan and the crackdown on password sharing will begin early next year. The company didn't say how much the streaming option with commercials will cost.
More below from the Associated Press.