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Netflix Says Catch Me if You Can

23 Janvier 2018

The stock jump came as investors celebrated Netflix's report that the company added a total of 8.3 million new streaming subscribers in the fourth quarter of 2017, which easily outpaced the forecast of 6.3 million new streamers from Wall Street and Netflix itself. The EPS consensus was agreed by 10 analysts from the Wall Street.

Global territories accounted for the bulk of the subscriber growth in the most recent quarter and hold the key to Netflix's future, with additions totalling 6.36 million to beat the 5.05 million average of analysts' estimates. And, the new additions could perhaps be a sign that Netflix has become such a desirable service that its customers will roll with future price hikes, too. "Despite this unexpected expense, we slightly exceeded our contribution profit and operating income forecast due to our stronger than expected member growth and the timing of worldwide content spend", the company said. "What pulls in people who haven't yet joined is all their friends are talking about the shows". According to the Analysts, the Low Earnings estimate for the current quarter is $0.32, while the High earnings estimate is $0.93.Comparatively, EPS for the same quarter a year ago was $0.43. The profit margin measures the amount of net income earned with each dollar's worth of revenue. He does expect the company to warn about a "modest negative impact" by the price increase and a potentially "modest" impact from the Winter Olympics coming up next month. The $7.99 monthly price of the basic one-screen, standard definition-video plan remained the same. Internationally, Netflix added 6.36 million memberships (compared with guidance of 5.05m), a new record for quarterly net adds for this segment.

Netflix crossed a fun milestone today, crossing the $100 billion mark for its market cap as it once again surprised industry observers with better-than-expected growth in its subscribers. Amazon still lacks a permanent studio head after Roy Price resigned in October amid sexual-harassment allegations.

Investors are betting that Hastings is right: Shares rose more than 8 percent after hours after the company reported better-than-expected subscriber growth in its Q4 2017 earnings report on Monday. Shares have risen 21% over the last six months.

Netflix benefitted from very strong growth overseas, with nearly 6.4 million of its new streaming users added in global markets in the most recent quarter.

Netflix shows picked up 20 Emmy awards past year, but just having a shiny object on a shelf isn't something that's going to indicate that the company is going to continue to grow at a healthy clip.

But the chief exec said investing in "bigger" productions like "Bright", the Will Smith-led recent release, will only extend Netflix's reach across the globe. If a firm can borrow money and use it to achieve a higher return than the cost of the debt, then the leveraging creates additional revenue that accrues to stockholders as increased equity. That torrid growth is testament to the first-mover advantage Netflix has, more than a decade after it planted a flag in streaming video. "It will definitely be higher in 2019 and 2020", he said. The stock decreased 2.77% or $0.16 during the last trading session, reaching $5.61.

As it has shifted more to original content, Netflix has been winning awards for its shows and has helped shake up both the television and film industries with its deep pockets. Members can watch as much as they want, anytime, anywhere, on almost any internet-connected screen.

"Consumers are tolerant as long as something's improving", Netflix CEO Reed Hastings, on a post-earnings webcast, said of the price increase.

So we've got a path ahead. Everybody else in streaming has to find one.

I wrote this article myself, and it expresses my own opinions.

"The market for entertainment time is vast and can support many successful services", the company said.

Netflix Says Catch Me if You Can