Netflix Inc. reported slower growth than analysts were predicting in the first quarter -- held back by a dearth of big releases like House of Cards that generate fresh subscriber signups at home and abroad.
The world's biggest paid video service signed 4.95 million new customers last quarter, less than the 5.49 million analysts were expecting. The shortfall shows how dependent Netflix is on its breakout hits to find new customers and keep existing ones. It'll make up some of that in the current period, with a forecast for viewer growth that beat analysts' forecasts.
Netflix needs to add millions of subscribers every quarter to help pay for the billions of dollars the company spends making TV shows and movies or licensing programs from others. The company, which has committed $15.3 billion for movies and TV shows over the next five years, hasn't given any indication it plans to slow those outlays and said Monday it plans to raise money.
Shares of Netflix fell 2.3 percent in extended trading after results were announced. They had risen 15 percent this year through Thursday.
Netflix could turn the tide in the second quarter, typically one of its weakest. The company, based in Los Gatos, Calif., has lined up a slew of high-profile releases in the coming months, including new seasons of House of Cards, Orange Is the New Black and Master of None. Netflix also plans to release three big-budget movies.
The heavy second-quarter schedule comes with costs and highlights a dilemma. Because of those expenses, Netflix said profit in the period will be 15 cents a share, short of analysts' estimate of 23 cents. The first quarter, lighter on new releases, was the company's most profitable ever and the first time international operations made money.
Investors have permitted Netflix to operate near break-even on the expectation that the company, which expects to top 100 million customers this week, will continue to grow rapidly, especially outside the United States. Chief Executive Officer Reed Hastings has also pledged to deliver material profits starting this year. Analysts are forecasting net income of $477.2 million, or $1.09 a share, on revenue of $11.2 billion, based on the average of estimates compiled by Bloomberg.
The company said first-quarter profit soared to $178 million, or 40 cents a share, compared with analysts' predictions of 37 cents.
Business on 04/18/2017
Print Headline: Netflix slowdown blamed on lack of hits