Wed, May 22, 2024

Shares of Netflix Following the Quarterly Results

TV and film industry

On Tuesday, shares of Netflix rose 2.3% in after-hours trading. The company reported fourth-quarter results and this news helped to boost the shares of Netflix.

Netflix surpassed the expectations on the top and bottom lines for the quarter. Let’s have a look at the results.

In the fourth quarter, earnings per share were $1.30. Hopefully, the company was able to exceed the market expectations when it comes to revenue. In the last quarter of 2019, the company’s revenue reached $5.47 billion.

However, the number of Domestic paid subscribers failed to reach the expectations as Netflix added 550,000 subscribers vs. 589,000 expected.

Nevertheless, Netflix was able to attract 8.33 million new customers from other parts of the world.

The company expects that in the first quarter of this year, earnings of $1.66 on revenue of $5.73 billion. According to analysts, earnings per share will be $1.20 and $5.76 in revenue.

It is worth mention that Netflix expects to attract 7 million paid customers in the first quarter of 2020. Meanwhile, analysts are more optimistic as they believe the number of new paid customers will reach 7.86 million.

Shares and the CEO of NetflixThe influence of fourth-quarter results

One of the problems for the company is a negative free cash flow. In the first quarter, according to the company negative free cash flow will be $1.7 billion. Overall for 2020, Netflix expects negative cash flow of $2.5 billion.

However, in the future, the company expects that it will solve the problem as it is moving toward being free cash flow positive.

Company’s CEO Reed Hastings is confident that Netflix will solve the issues connected with negative cash flow thanks increase in revenue and operating income.

According to the company letter to shareholders, recent price changes had a negative impact on Netflix. Also, competition is increasing as more and more companies are launching streaming services.

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