Netflix Posts Q4 Subscriber, Revenue Gains

Via Netflix Canada

Via Netflix Canada

Netflix added 8.8m new paying subscribers in the last three months of 2018, comfortably beating its own estimate of 7.6m new subscribers, and taking its total number of subscribers globally to 139m. Global subscriber additions were at 7.31 million, vs. 6.14 million forecast.

The company posted earnings per share of 0.3 USA dollar, beating Wall Street estimates.

It forecast first-quarter revenue of $4.49 billion, slightly behind analysts' average estimate of $4.61 billion. The company's stock rose on the news, and analysts noted that the subscription cost is still lower than that of Hulu.

"(The company) still only accounts for perhaps 10 percent of all TV viewing hours in the U.S. This is growth defined, in our view".

Netflix posted a second straight quarter of strong subscriber growth on Thursday but its shares fell in extended trading as revenue missed estimates. The incredible subscription growth clearly justifies hiking membership prices in the US.

Netflix increased the price of its most popular standard plan from 10.99 US dollars to 12.99 dollars.

Netflix is racing to keep its huge lead in an increasingly crowded field of streaming services, with new offerings coming from Walt Disney Co. and AT&T Inc.'s WarnerMedia later this year. The losses will start to shrink thereafter, the company said.

It's unclear if Netflix is in the "beginning of the end" stages of its growth cycle or "end of the beginning", Martin said.

Netflix said other recent audience favourites included romantic television thriller series You and British young adult comedy series Sex Education, both of which are expected to be watched by more than 40 million member households in their first four weeks.

Beyond that, Netflix's growing stable of original content - along with its sizable library of licensed TV shows and movies - arguably provides the best bang for the buck among all streaming services. A Streaming Observer survey found 24 percent of respondents "might cancel" Netflix and 3 percent will "definitely cancel" in light of the price hike.

"We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience", the company said in a statement.

Customers in about 40 Latin America countries where Netflix bills in USA currency will also be affected, excepting key worldwide markets such as Mexico and Brazil. Firms such as Goldman Sachs (NYSE: GS), J.P. Morgan (NYSE: JPM), Bank of America (NYSE: BAC), UBS, and others all raised their price targets. According to Netflix, the movie is estimated to be viewed by more than 80 million households within the first four weeks of appearing on the streaming platform. The shares stood at $332.94 heading into Tuesday's trading session.

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