Netflix saw its stock take a six percent tumble this week after the streaming giant missed its third-quarter earnings targets and expected subscriber growth.
According to Variety, Netflix added only 2.2 million of the expected 2.5 million new subscribers. The streamer expected to add 6 million paid net adds in Q4 to bring the company to a record 34 million ads. Missing the mark by millions sent Netflix stock tumbling on Tuesday, falling 6 percent. Their third quarter 2020 gains compare to 8.8 million in 2019.
The company’s previous record was 28.6 million in 2018.The streamer also posted higher revenue but realized $1.74 earning per share whereas the Wall Street forecast was for $2.13 eps. The revelations caused Netflix stock to slip 6 percent on Tuesday, the paper said.
Still, Netflix posted huge gains in the first and second quarters when so many were forced to stay home due to the world-wide coronavirus lockdowns. The company added 15.8 million new subscribers in Q1 and another 10.1 million in Q2 this year. Netflix posted revenue of $6.44 billion, up 22.7 percent. The company also reported 19.1 million paid subscriptions, up 23.3 percent over last year.
Netflix also reported having a $1.1 billion positive cash flow but said that is mostly because no money is going to fund its original content projects, which are shuttered due to coronavirus restrictions. The company warned ahead of time that its Q4 numbers might slip into negative territory as many productions begin to return to filming.
The company added that it is making “good and careful progress returning to production.”
The California-based company is still far and away the biggest streaming service of the lot, with its 195.2 million subscribers. The next closest is Amazon Prime, with about 112 million subscribers, followed by Disney with 60.5 million, and then the 36.3 million with HBO Max.
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