Netflix Inc on Tuesday posted its weakest subscriber gains in four years as streaming competition increased, COVID-19 pandemic restrictions eased and live sports returned to television.
The company added 2.2 million paid subscribers globally during the quarter that ended on Sept. 30, missing Wall Street’s target of 3.4 million and its own forecast.
Earnings per share also landed below analyst expectations at US$1.74. The consensus forecast was US$2.14, according to IBES data from Refinitiv.
Shares of Netflix, one of the biggest gainers this year as people stayed home amid the pandemic, dropped nearly 6 percent to US$494 in after-hours trading on Tuesday.
“Domestic subscribers were nearly flat, which highlights Netflix’s saturation in the US,” said Ross Benes, an analyst with eMarketer.
With additions slowing in the US, revenue growth will likely come from price increases, he said.
The company reported a blockbuster quarter at the start of the pandemic, adding 15.8 million paying customers from January through March.
Netflix had warned investors that a sudden surge in new sign-ups would fade in the latter half of the year as COVID-19 restrictions eased. Netflix forecast that in the fourth quarter, it would bring in 6 million new subscribers worldwide, short of the 6.51 million that analysts expected.
The video streaming pioneer is trying to win new customers and fend off competition as viewers embrace online entertainment. During the third quarter, Netflix released Emily in Paris, Enola Holmes and The Devil All the Time.
Netflix acknowledged that competition was increasing as studios across Hollywood from Walt Disney Co to AT&T Inc’s WarnerMedia have restructured to compete more directly for video subscribers.
“Competition for consumers’ time and engagement remains vibrant,” Netflix said in a letter to shareholders.
In the past few months, major sports resumed play and nascent streaming services, including AT&T’s HBO Max and Comcast Corp’s Peacock, offered audiences new options.
Netflix said its results reflected the fact that it saw such a big surge in customers early in the year.
“We continue to view quarter-to-quarter fluctuations in paid net adds as not that meaningful in the context of the long run adoption of internet entertainment, which we believe is still early and should provide us with many years of strong future growth as we continue to improve our service,” the company said.
Netflix officials noted that the company had pulled in more subscribers in the first nine months of the year than in all of last year. It ended the third quarter with 195.2 million global streaming customers.
“Next time we get together, we should be over 200 million members, completing a year of 34 million [additions],” an annual record, cochief executive Reed Hastings said in an analyst interview.
The company also said it expected to complete shooting over 150 productions by the end of the year and that it would release more original programming in each quarter of next year compared with this year.
Revenue rose 22.7 percent to US$6.44 billion in the third quarter, edging past estimates of US$6.38 billion.
Net income rose to US$790 million, or US$1.74 per share, in the quarter from US$665.2 million, or US$1.47 per share, a year earlier.
FIVE NEW FABS: An acquisition of Siltronic would boost GlobalWafers’ market share from 17 to 30 percent, easily surpassing Japanese rival Sumco’s 25 percent GlobalWafers Inc (環球晶圓) yesterday said it is in final talks to acquire Germany-based Siltronic AG in a 3.75 billion euro (US$4.5 billion) deal, which might help it compete with its closest rival Sumco Corp of Japan. The acquisition would be the fifth for GlobalWafers since 2008, as it has grown to become the world’s No. 3 supplier of silicon wafers through such deals. GlobalWafers, which has a 17 percent market share, would see its market position greatly elevated to 30 percent when combined with Siltronic’s 13 percent, according to a presentation Siltronic gave to its investors at a quarterly conference in August. Sumco
With the speed cryptocurrency is emerging as the millennial generation’s alternative asset of choice in India, it is hard to imagine that just two years ago a couple of blockchain pioneers were briefly in police custody. Sathvik Vishwanath and Harish BV, cofounders of a then five-year-old start-up, were arrested in late 2018. No, they had not pulled off a shady initial coin offering. Their “crime” was that they put up a kiosk in a mall in Bangalore where customers could swap bitcoin, ether or ripple for cash or vice versa. That was the whole point of unocoin, their crypto token exchange.
CONCERNS: The bank would act if it noticed currency speculation, the governor said, but he did not comment on a likely trajectory of the NT dollar against the greenback The central bank would intervene in the market whenever necessary to help stabilize the New Taiwan dollar, central bank Governor Yang Chin-long (楊金龍) said yesterday, adding that it is concerned Taiwan might be placed on the US watchlist for currency manipulation. The Control Yuan recently sent letter inquiring about the central bank’s market regulation efforts, Yang told a meeting of the legislature’s Finance Committee on the NT dollar’s appreciation and property price hikes. “It is the central bank’s top responsibility to stabilize foreign exchanges,” he said. The central bank has often stepped in toward the end of trading sessions to moderate the NT
Qualcomm Inc expects global shipments of 5G smartphones to more than double to between 450 million and 550 million units next year from this year, driven by increasing 5G network deployment worldwide and broader adoption of 5G technology beyond smartphones, a company executive told a virtual news conference yesterday. The San Diego-based company said that more than five times more telecoms have commercially launched 5G services in the first 18 months of the 5G era, compared with wireless technology transitions to previous generations. The momentum is to pick up speed in 2022, with the shipment volume of 5G-ready smartphones projected to reach