Streaming giant jumps 2.5% after hitting 158 million global subscribers
Netflix shareholders enjoyed a modest boost on Thursday, one day after the streaming heavyweight surpassed its Q3 earnings expectations and narrowly missed out on hitting the 7 million new subscribers it had forecast.
Netflix’s stock increased by 2.5% on Thursday, closing at $293.35 per share. The company’s stock had run past $300 per share in after-hours trading on Wednesday — the first time it had crossed the $300 threshold since August — but didn’t sustain its gains on Thursday.
Still, the increase comes after a particularly tough few months for Netflix on Wall Street. Its share price had dipped 25% since July when the company reported underwhelming second-quarter subscriber growth, punctuated by Netflix losing customers in the U.S. for the first time ever.
Netflix rebounded a bit during the third quarter, adding 6.8 million new subscribers. 6.3 million of those new customers came from outside the U.S. Overall, Netflix now has 158 million global subscribers. The bright spot for Netflix and its shareholders, however, was the company reporting $1.47 earnings per share, easily trumping the $1.04 analysts had projected. Sales of $5.25 billion matched revenue estimates.
The third quarter coincided with several major Netflix originals returning to the service, including “Stranger Things.” Netflix said Wednesday 64 million accounts watched at least one episode of the third season of Stranger Things in the month following its July release.
Netflix’s Q3 earnings came as it’s about to face increased streaming competition. Disney and Apple will both launch their new streaming services next month, while HBO Max and NBCU’s Peacock are set to debut next year. Netflix executives. during the company’s Q3 earnings call, said the cheaper cost of Apple and Disney’s streaming services will not stop it from raising subscriber fees in the future.
“Consumers don’t necessarily see a need to decide between Netflix and the new, high profile services, particularly since many of the new services are priced under $8 per month,” Parks Associates analyst Brett Sappington told TheWrap. “Most see it as ‘Netflix and,’ not ‘Netflix or.'”