Netflix shares slip as spending weighs on profits

Netflix criticised for using real disaster footage in Bird Box

Stocks trading at high earnings multiples are more prone to sell off if growth targets are missed.

The stock fell about 4% immediately following the news.

Netflix Inc NFLX.O reported revenue and a first-quarter forecast slightly below Wall Street estimates on Thursday, sending shares of the world's largest streaming service down 4 percent in after-hours trading.

In December, Netflix said that more than 45 million accounts watched the apocalyptic film in its first seven days, marking a record-breaking debut. The company saw 8.8 million paid net additions, higher than Wall Street's expectation of 7.6 million.

As the following chart shows, this week's change marks the fourth price hike to Netflix's standard plan in nine years.

"Netflix's growing catalogue of exclusive shows and ongoing push to create original content is clearly reaping rewards; recent hits such as Bird Box and Haunting of Hill House are generating the same buzz as Oscar-winning films". The Company is also expanding into the film market with the launch of its original movie: ROMA.

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.

Death date: Microsoft will stop supporting Windows 10 Mobile in December 2019
Usually, however, this approach simply leads to needlessly fragmented markets until the also-rans finally call it quits. However, until that happens, one can at least be sure of not seeing any Microsoft-branded smart speaker.

In the fourth quarter, the company said its negative free cash flow expanded to $1.32 billion versus a year-ago deficit of $524 million, bringing its cash burn up to $3 billion in 2018. (NASDAQ: ATVI) earlier in January.

"As a result of our success with original content, we're becoming less focused on 2nd run programming", Netflix said to shareholders.

Netflix also mentioned that it is directly competing and losing against globally iconic game: Fortnite. It expects to add another 8.9 million subscribers in the quarter that ends in March, the vast majority of which are expected to come from strong growth in its worldwide markets. The last time Netflix raised prices was in October 2017.

Although it wasn't the answer she wanted, Morin says she's still satisfied that Netflix is sensitive to the recovery of her citizens, many of whom are suffering post-traumatic stress.

"1) continued strong paid subs momentum in both United States and int'l; 2) content success (now with some engagement disclosure) demonstrates how investing in content drives a "flywheel" of engagement, sub growth & new content creators looking to partner; & 3) potential for scale of revenue (driven by pricing & subs growth) against content investments to cause a positive inflection in FCF trendline in 2020 and beyond".

Earnings per share of 30 cents beat estimates of 24 cents and revenue rose 27.4% to $4.19 billion. Netflix said it ended 2018 with 139.2 million paying memberships, up 8.8 million from quarter start and up 29 million from the beginning of the year. Analysts are expecting earnings of Dollars 82 cents per share on revenue of USD 4.61 Billion.

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