Netflix shares slip as spending weighs on profits

Netflix shares slip as spending weighs on profits

Netflix shares slip as spending weighs on profits

Netflix reported fourth quarter results and said it grew annual revenue 35% to $15.8 billion in 2018, and almost doubled operating profits to $1.6 billion.

Netflix cut its outlook for the current quarter as its revenue and subscriber growth disappointed some investors, sending the streaming giant's stock tumbling almost 4 percent in after-hours trades. Analysts had expected 7.5 million new subscribers while Netflix itself had forecast 7.6 million.

And with premium subscriptions now sitting at $16 per month, it's not out of the realm of possibility that Netflix could eventually charge $20 per month for the ability to stream 4K content in the future.

"We serve on average about 100 million hours a day to television screens in the US", the company says.

Previously, Netflix said it had 57.4 million US subscribers and 72.7 million worldwide subscribers.

"The fact that investors reacted negatively to what amounted to a strong performance indicates the extent to which Netflix has set a high bar", said eMarketer media analyst Paul Verna.

The streaming behemoth said fourth-quarter earnings increased 27.4 percent to $4.19 billion, which was slightly below Wall Street analyst forecasts.

But the company fell short of Wall Street's subscriber estimates sending its stock diving nearly 4% in after-hours trading on Thursday. During the company's earnings report yesterday, the streaming giant revealed that it added 8.8 million new subscribers during the holiday quarter.

Netflix has removed himself so far from his beginning as a sales channel, and now resembles more and more a Hollywood Studio. Sarandos discussed the strategy going forward and where the increased subscriber fees would help with buying original films like "Bird Box".

The video streaming pioneer's shortfall in revenue expectations disappointed investors looking for a bigger payoff from the company's recent decision to raise prices as much as 18 percent for its US customers.

The 44-year-old actress plays Jessica Hayes, the sister of Sandra Bullock's Malorie, in the hit Netflix film, which has earned a staggering amount of viewers since its release in December last year.

Previously on January 11, a Morgan Stanley strategist Mike Wilson said that the sentiment in the US stock market was extremely bearish due to the earnings revisions made by companies in the likes of Apple.

According to North Shore News, the footage was first spotted by high school ethics teacher Guillaume Bouchard while he was watching Season 3 of Netflix original sci-fi series Travelers.

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