Street Reaction To Netflix Revs Mixed
Trying to put a rocky 2011 in its rear-view mirror, Netflix this week boasted $870 million in revenue for its fiscal first quarter. “The company also added almost 3 million subscribers to its streaming service -- 1.74 million domestic and 1.21 million for international -- bringing it up to a total of 26 million users streaming worldwide,” The Verge reports.
Alas -- as demonstrated by a stock slip this week -- “Wall Street remembers 2011,” writes AllThingsD. “Specifically, Wall Street doesn’t believe [Netflix CEO] Reed Hastings’ prediction that his company will add 7 million customers to its U.S. streaming-video service this year.”
“The stock slumped after Netflix said subscriber additions would slow down in the second quarter,” VatorNews reports. “The Los Gatos, Calif.-based company said it's projecting 23.6 million to 24.2 million subs in the U.S., up 200,000 to 800,000 from the first three months of this year when it reached 23.4 million subscribers, up 1.7 million from the prior quarter.”
“Netflix's first-quarter financials came in better than expected after a dismal 2011, but it wasn't enough for investors to overlook a weak revenue outlook,” notes CNNMoney.com. “Netflix said it may turn a profit again in the second quarter. The company didn't rule out a loss, but its forecast ranged from a loss of 10 cents a share to a profit of 14 cents a share.”
“Netflix’s ability to source content is a worry,” writes The Next Web. “If it has less total content, it has a harder time providing a value propostion [sic] to consumers, who may leave the service. That in turn would cut revenues.”
As expected, the company’s DVD business saw another decline, down 1.08 million customers to 10.09 million total -- about 7 million of which also subscribe to streaming. Going forward, Netflix expects the physical media side to continue its decline, albeit at a slower pace than past quarters.
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