(Bloomberg) — Netflix Inc. fell in extended trading after its subscriber forecast missed analysts’ estimates, raising concerns about its pace of growth in an increasingly competitive streaming industry.
The world’s largest paid online TV network signed up 9.6 million subscribers in the first quarter, a record that beat analysts’ estimates of 8.94 million new customers globally. But the streaming giant also said price increases have led to more churn in the U.S. It’s predicting just 5 million new signups globally this period, compared with Wall Street forecasts for 6.09 million.
The weakness in the forecast reflects fallout from the price increase at home. This quarter, Netflix predicts it will add 300,000 customers domestically and 4.7 internationally. Analysts were projecting 617,000 additions in the U.S. and 5.47 million elsewhere, the average of four estimates compiled by Bloomberg.Last quarter’s record subscriber addition reflected big gains overseas and slower growth in the U.S. The company added 1.74 million customers at home and 7.86 million everywhere else. During the period, Netflix released new series produced in the U.K., South Korea and India.Netflix’s budget eased a bit in the first quarter. The company has committed $18.9 billion for future programming, down from more than $19 billion three months earlier. While Netflix reports a profit, it still spends more than it makes. The company boosted its estimated cash burn for the year to $3.5 billion.
The shares plunged in after-hours trading before recovering. The stock was down as much as 9.3 percent but recovered to be down about 1 percent. Netflix fell almost 4 percent last week when Walt Disney Co. unveiled the details of its upcoming Disney+ streaming service for families and kids.
To contact the reporter on this story: Lucas Shaw in Los Angeles at [email protected]
To contact the editors responsible for this story: Nick Turner at [email protected], Rob Golum
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