(Reuters) – Netflix Inc (NFLX.O) added a little more subscribers than Wall Street expected in the third quarter, a relief for investors, who are needed to ensure that the company would be able to fall short as well as Disney and others and to prepare for the recording of the streaming video wars.
FILE PHOTO: The Netflix logo is is shown on a television remote control, in this illustration photograph taken in Encinitas, California, USA, on 18 January 2017. REUTERS/Mike Blake/File Photo
The results for each of the months of July and September, representing a rebound from the previous quarter, when Netflix lost a U.S. streaming customers, and for the first time in eight years, and missed the targets for new customers in the foreign country. Shares of Netflix rose by 9.2% in after-hours trading on Wednesday to $312.69.
That performance, coupled with concerns about the new competition, it had weighed on Netflix’s stock, which had fallen by 21% from the last reporting a profit in regular trading on Wednesday.
In the third quarter, Netflix has been strengthened by the new seasons of tv series such as “Awkward” and “13 Reasons Why.” The company has added the 6.77 million paying customers from all over the world, at the top of nearly 6.7 million, the average expectation of analysts, according to IBES data, Refinitiv.
“Netflix’s results were good enough that they have assuaged concerns over the price sensitivity and the level of penetration in the domestic markets,” said Fitch ratings managing director Patrice Cucinello. “The catch is that the competition has not yet affected them.”
The company projected that it would reach more than 7.6 million customers over the last three months of the year. Analysts had expected a forecast of 9.4 million euros. The company will also be releasing a new installment of “The Crown,” and the Martin Scorsese film “The Irishman,” in that period of time.
But in the face of the new competition, starting in November, Disney+, a streaming service and Walt Disney Co. (DIS.(N), which will be filled with movies and TV shows to Disney’s popular Marvel series, Star Wars, animations, and other features.
Apple Inc’s (AAPL.D) it will also be the debut of a lot of the smaller video streaming services with original programming in the month of November. AT&T Inc’s (T. N) (HBO) (Max), and a new offer from Comcast Corp’s (CMCSA.Oh, it is anticipated that the market will be next year.
Netflix argues that the new services would be to increase the rate of interest in the video streaming market in general.
“In our view, the likely outcome of the introduction of this new service will be to accelerate the shift from linear TV to on-demand consumption of entertainment,” the company wrote in a letter to investors.
Netflix recognizes, however, that it is still being hit by price increases, which came into force earlier this year in the United States of america. “The retention is still not completely back on to a sustainable basis for the pre-price-change levels, which has led to a slowdown in US growth,” he said.
In the third quarter, Netflix’s net income rose to $665 million, or $1.47 per share, up from $403 million, or 89 cents a share, a year earlier.
The total turnover increased to a total of $5.25 billion to $4 billion. Analysts, on average, had expected $5.52 billion.
The next earnings report, Netflix will have to start with the announcement of the turnover of the membership of the Asia-Pacific region, Europe, the Middle East, Africa, Latin America, and the United States, according to the company.
Reporting by Neha Malara, Bengaluru and Lisa Richwine in Los Angeles; Additional reporting by Helen Coster in the New York; Editing by Anil D’silva and Lisa Shumaker