Netflix Inc. (NFLX.O) said slower production of TV shows and movies during the pandemic affected subscriber growth in the first quarter, and on Tuesday sent shares of the world’s largest streaming service a 11%.
Approximately 3.98 million people subscribed to Netflix from January to March, below the average projection of 6.25 million analysts surveyed by Refinitiv.
Netflix estimates it will add just 1 million new streaming customers in the second quarter. Analysts had expected a forecast of about 4.8 million.
Shares of Netflix fell 11% in overtime trading to $ 489.28. Its shares have risen 27% in the last twelve months, compared to a 63% increase in the Nasdaq Composite Index (.IXIC), which has been highly technological.
The company expects member growth to accelerate in the second half of the year when it releases new seasons of “You,” “Money Heist” and “The Witcher” and the action movie “Red Notice,” among other titles.
A year ago, Netflix added a record 15.8 million customers as the pandemic forced people around the world to stay home. The company said Tuesday that the pandemic made it difficult to shoot new shows.
“These dynamics also contribute to a lighter slate of content during the first half of 2021, and we therefore believe growth will be slower,” the company said in a quarterly letter to shareholders.
Analysts project that people will spend less time in their living room as COVID-19 vaccines spread and more people will leave their homes.
Rival media companies have declared the broadcast a priority and are spending billions to compete with Netflix. Walt Disney Co. (DIS.N) Disney + crossed 100 million subscribers in March. Netflix’s total streaming customers stood at 207.6 million at the end of March.
Netflix said it did not believe the competition would materially change in the quarter or affect its new signings “since the forecast was excessive in all of our regions.”
But the share of new U.S. subscribers to Netflix fell to 8.5% during the quarter, below 16.2% from the same period last year, according to Kantar Media.
During the quarter, Netflix lost one of its most popular titles when the work comedy “The Office” moved to Comcast Corp.’s Peacock streaming service (CMCSA.O).
Netflix also increased its monthly rates in Britain, Germany, Argentina and Japan during the quarter.
New customers totaled 1.8 million in Europe, 1.36 million in Asia and 360,000 in Latin America.
“What was not expected was the strength of the slowdown in international markets, where competition is significantly lower,” said eMarketer analyst Eric Haggstrom.
Excluding items, the company earned $ 3.75 per share in the first quarter, surpassing analysts ’estimates of $ 2.97 per share.
Revenue increased to $ 7.16 billion, from $ 5.777 billion during the quarter, surpassing previous estimates of $ 7.13 million.
Net income rose to $ 1.71 million, or $ 3.75 per share, from $ 709 million, or $ 1.57 per share, a year earlier.
Our standards: the principles of trust of Thomson Reuters.