Why Netflix Stock Fell Nearly 5% on Wednesday
Shares of Netflix (NASDAQ: NFLX) fell by as much as 4.8% on Wednesday morning following the media-streaming specialist's second-quarter earnings report. Netflix beat some financial targets while falling short on others, and the market focused on the unsatisfactory pieces of the puzzle. The stock was down by 4.1% as of 1:25 p.m. EDT.
Second-quarter revenues rose 19% year over year to $7.34 billion, slightly above management's guidance of $7.30 billion and Wall Street's consensus estimate of $7.32 billion. Earnings jumped 90%, landing at $2.97 per diluted share. Here, the guidance target pointed to $3.16 per share and the average analyst wanted to see roughly $3.15 per share. Netflix's operating profits also came in just below management's official target, while its 1.54 million net new paying subscribers exceeded the official goal of 1 million.
Looking ahead to the third quarter, Netflix forecast that it would add 3.5 million net new subscribers, below the Street's consensus estimate of at least 5 million new accounts. Management also said that it will roll out a range of games as a free add-on to its video-streaming plans, turning every Netflix-capable device into a potential gaming platform.
Source Fool.com
