The streaming giant Netflix recorded a 2nd quarter (Q2) company report that ‘managed to avoid its worst-case scenario’, with the loss of less than 1 million total user subscriptions.
It is understood that the company is projecting a loss of 2 million user subscriptions for 2Q during April but a new report saw it record a drop of only 970,000.
It indirectly allayed previous Wall Street concerns that the streaming TV boom was coming to an end.
Netflix shares, which so far this year are down 67%, showed an 8% increase as soon as the report was published and signaled to investors that the company is still resilient despite the turbulent global economy.
Comment Netflix CEO Reed Hastings is still too early to celebrate but looking ahead the company believes the streaming industry will be bullish again.
He added that the company praised the fictional series ‘Stranger Things’ which recorded the highest number of views in Netflix history and plans to offer more such content in the future to impress customers.
Meanwhile Micheal Pachter of Wedbush Securities said Netflix shares rose as it downgraded due to slower growth in addition to cost -cutting factors and significantly free cash flow next year.
Even so, accompanying Netflix’s rise were shares of Roku Inc that rose 2.7% while Walt Disney Co. and Paramount Global each jumped 1%.
On the other hand, for the next quarter Netflix put its forecast for user subscription growth to hit 1 million while Wall Street analysts are betting 1.84 million based on Refinitiv polling sources.
Revealing the Contents of the Netflix 2Q Report
For 2Q, the company's revenue rose 9% to $ 7.97 billion due to the strengthening value of the dollar but was still below analysts' expectations at $ 8.04 billion.
Also, for the April to June period Netflix’s earnings per share were worth $ 3.20 above the Wall Street consensus at $ 2.94.
