This is earnings report season and yesterday it was Netflix turn. The online streaming service exceeded all expectations, featuring accelerated growth both in the US and abroad. While profit was slightly lower than expected, second-quarter sales left estimations behind.
Netflix reported 5.2 new subscribers in the second quarter of 2017 – that’s 2 million more than analysts forecasted. Furthermore, for the first time ever, the number of international subscribers exceeded US audience.
So, how did the shares reacted?
According to Bloomberg, Netflix shares skyrocketed by as much as 11% in after-hour trading. What does this tell us? That for now anyway, investors care more about subscriber growth than they do about profits.
The report also suggests that Netflix is planning to release a huge selection of new, in-house shows and movies with new series set planned not just for English-speakers, but also in Spain, Mexico and South Korea. It’s viewed by many as a smart move by the company, since with so many US customers, the foreign markets offer the much-needed growth potential – and there’s plenty of it. The company said it will focus more on Asia, where different customer’ preferences and a wider mobile streaming usage pose a new set of challenges.
Last week, Netflix earned a record of 91 Emmy nominations.
What will happen to Netflix shares when the market opens?
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