Netflix shares drop on earnings miss

October 21, 2020 11:00

Shares in Netflix were immediately down 6% in after-hours trading after the online streaming giant missed earnings estimates, as well as its own guidance for new subscriptions:

  • Third-quarter revenue came in at $6.44 billion against an expected $6.38 billion
  • Earnings per share (EPS) came in at just $1.74 per share against an expected $2.13 per share

For online tech companies, one of the most important metrics is new subscriber growth. The company reported a slowing subscriber growth rate with 2.2 million paid subscribers last quarter against its own projected 2.5 million new subscriber goal. However, the company did report an increase of 10.1 million subscribers in the second quarter and 15.8 million new subscribers in the first quarter due to the coronavirus pandemic and lockdowns around the world.

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For the fourth quarter, Netflix is forecasting revenue of $6.57 billion on earnings of $1.35 per share with 6 million net paid subscribers. If the company does reach its own fourth-quarter guidance that means it will have added 34 million net subscribers in 2020, surpassing its previous annual high of 28.6 million in 2018.

How to trade Netflix shares with Admiral Markets UK Ltd

If you are feeling bullish or bearish on the price of 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, or another instrument, 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 Web, #NFLX, Weekly - Data range: April 20, 2014, to October 21, 2020, performed on October 21, 2020, at 6:53 am BST. Please note: Past performance is not a reliable indicator of future results.

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