Netflix Inc shares on Thursday dived after the leading streaming entertainment service reported relatively flat quarterly profits despite rising subscriber numbers.
Netflix reported a profit of US$720 million on revenue of US$6.1 billion last quarter, compared with US$709 million profit on US$5.8 billion in revenue during the first three months of the year.
Wall Street analysts had expected stronger profit, especially as people who are hunkered down at home due to the COVID-19 pandemic turn to the service for entertainment.
Photo: Reuters
Ranks of paid memberships grew by 10.1 million to about 193 million, but Netflix warned growth could cool since sheltering-in-place likely meant people rushed to join in the early months of the pandemic as lockdowns began, instead of spreading out over the year.
Shares quickly dove more than 10 percent in after-market trades that followed release of the earnings figures, but regained a bit of the loss.
Wedbush Securities Inc analyst Daniel Ives described the share stumble as a “near-term speed bump” due to overly exuberant expectations.
“Streaming growth is seeing a bonanza in this COVID environment,” Ives said.
Pandemic-related restrictions have sped up a lifestyle shift from traditional television to streaming shows online, eMarketer Inc analyst Eric Haggstrom said.
“Looking forward, even as lockdowns are relaxed and new competitors begin to scale their services, Netflix will extend its lead as the first stop for entertainment,” Haggstrom said.
Netflix said in a letter to shareholders that while its slate of original shows for this year is on track, it is focused on safely getting production back up and running.
“As the world slowly reopens, our main business priority is to restart our productions safely and in a manner consistent with local health and safety standards to ensure that our members can enjoy a diverse range of high quality new content,” executives said in the letter.
“There is no one-size-fits-all approach, and we’re adapting to local circumstances. Today, we’re slowly resuming productions in many parts of the world,” they said.
Netflix is facing increased competition from tech giants such as Apple Inc and Amazon.com Inc, along with entertainment titans including Walt Disney Co, NBCUniversal Media LLC and AT&T Inc’s WarnerMedia.
Social media is also a threat.
“TikTok’s growth is astounding, showing the fluidity of Internet entertainment,” Netflix said in the letter.
“Instead of worrying about all these competitors, we continue to stick to our strategy of trying to improve our service and content every quarter faster than our peers,” it said.
Greg Peters, the company’s new chief operating officer as well as chief product officer, on Thursday said in a video interview that he foresees future growth coming from outside the US.
“Think of more and more employees outside the United States, more productions, more operations happening outside the US and hopefully many, many more members outside the US,” he said.
Netflix has invested billions of dollars in original content, as has streaming television rival Amazon, to win and keep subscribers in the increasingly competitive online entertainment market.
The service has found success with series such as Umbrella Academy as well as game shows such as Too Hot To Handle, along with its own films and reality television.
“We want to have so many hits that you just come to Netflix and go hit-to-hit and never have to think of those other services,” chief executive Reed Hastings said.
Anna Bhobho, a 31-year-old housewife from rural Zimbabwe, was once a silent observer in her home, excluded from financial and family decisionmaking in the deeply patriarchal society. Today, she is a driver of change in her village, thanks to an electric tricycle she owns. In many parts of rural sub-Saharan Africa, women have long been excluded from mainstream economic activities such as operating public transportation. However, three-wheelers powered by green energy are reversing that trend, offering financial opportunities and a newfound sense of importance. “My husband now looks up to me to take care of a large chunk of expenses,
SECTOR LEADER: TSMC can increase capacity by as much as 20 percent or more in the advanced node part of the foundry market by 2030, an analyst said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to lead its peers in the advanced 2-nanometer process technology, despite competition from Samsung Electronics Co and Intel Corp, TrendForce Corp analyst Joanne Chiao (喬安) said. TSMC’s sophisticated products and its large production scale are expected to allow the company to continue dominating the global 2-nanometer process market this year, Chiao said. The world’s largest contract chipmaker is scheduled to begin mass production of chips made on the 2-nanometer process in its Hsinchu fab in the second half of this year. It would also hold a ceremony on Monday next week to
TECH CLUSTER: The US company’s new office is in the Shalun Smart Green Energy Science City, a new AI industry base and cybersecurity hub in southern Taiwan US chip designer Advanced Micro Devices Inc (AMD) yesterday launched an office in Tainan’s Gueiren District (歸仁), marking a significant milestone in the development of southern Taiwan’s artificial intelligence (AI) industry, the Tainan City Government said in a statement. AMD Taiwan general manager Vincent Chern (陳民皓) presided over the opening ceremony for the company’s new office at the Shalun Smart Green Energy Science City (沙崙智慧綠能科學城), a new AI industry base and cybersecurity hub in southern Taiwan. Facilities in the new office include an information processing center, and a research and development (R&D) center, the Tainan Economic Development Bureau said. The Ministry
State-run CPC Corp, Taiwan (CPC, 台灣中油) yesterday signed a letter of intent with Alaska Gasline Development Corp (AGDC), expressing an interest to buy liquefied natural gas (LNG) and invest in the latter’s Alaska LNG project, the Ministry of Economic Affairs said in a statement. Under the agreement, CPC is to participate in the project’s upstream gas investment to secure stable energy resources for Taiwan, the ministry said. The Alaska LNG project is jointly promoted by AGDC and major developer Glenfarne Group LLC, as Alaska plans to export up to 20 million tonnes of LNG annually from 2031. It involves constructing an 1,290km
RSS