Netflix tanks after earnings miss!

July 17, 2020 12:30

Shares of Netflix (NFLX) fell sharply after the online streaming company reported a second-quarter earnings fall that came in well below expectations. While the company also reported a surge in users due to people staying at home through the lockdown, the guidance on new subscribers was less than half what analysts expected.

The share price of Netflix dropped nearly 10% on the release of the report. Did you know you can speculate on Netflix's share price using Contracts for Difference (CFDs) which allows you to potentially profit from both rising and falling markets? Get started with a free demo trading account today!

Here are the key numbers from Netflix's earnings report:

  • Earnings per share (EPS): $1.59 vs $1.81 expected
  • Q2 revenue: $6.15 billion vs $6.08 billion expected
  • Q2 subscribers: 10.09 million vs 8.26 million

Interestingly, the miss in earnings was largely due to a one-time charge related to tax credits in California. Even though second-quarter revenue and subscribers beat analyst expectations, which now stand at 192.95 million subscribers globally, investors were more concerned about the low forward guidance.

The company announced it expects to add just 2.5 million paid subscribers in the third-quarter which was less than half the 5.27 million expected. Fortunately, its launch for original shows and movies this year is still intact due to the long content production lead times. However, 2021 will have fewer series launches due to the halt in production this year.

Netflix also announced that Ted Sarandos was promoted to the co-CEO role.

How to trade Netflix with Admiral Markets UK Ltd

If you are feeling bullish or bearish on Netflix's share price you can speculate on its price direction using CFDs. To get started, follow these five simple steps:

  1. Log in to your existing Admiral Markets trading account, or open a live or demo trading account in just a few minutes.
  2. Click Trade on your chosen account which will direct you to the Admiral Markets MetaTrader Web Platform.
  3. Type in Netflix at the bottom of the Market Watch search box and then drag the symbol onto the chart.
  4. Use the one-click trading feature on the chart or right-click on select Trading -> New Order.
  5. Choose your entry, stop loss and target levels and position size (volume) and then confirm the trade.

Source: Admiral Markets MetaTrader 5, #NFLX, Daily - Data range: 18 October 2019 to 17 July 2020. Please note: Past performance is not a reliable indicator of future results. Last five-year performance: 2019 = +20.89%, 2018 = +39.44%, 2017 = +55.06%, 2016 = +8.42%, 2015 = +134.38%, 2014 = -7.21%.

Did you know that you can open a free demo trading account so you can test your trade ideas and theories regarding Netflix's share price in a virtual trading environment? Open your free account today by clicking on the banner below:


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