Netflix (NFLX) had a great quarter.
Unfortunately, the company’s weaker than expected forecast took wind out its sails.
For the first quarter of 2019, Netflix posted EPS of 76 cents, as compared to estimates calling for 57 cents. Revenue was $4.52 billion, as compared to expectations for $4.5 billion. It even added 1.74 million subscribers, as compared to estimates for an addition of 1.61 million. International paid subscribers soared to 7.86 million, as compared to 7.31 million estimates.
Overall, it was a great quarter.
Unfortunately, guidance left a lot to be hoped for.
The company provided a lighter than expected EPS forecast of 55 cents, which is far less than the 99 cents analysts were hoping for. It also sees a second quarter addition of five million subscribers, far short of expectations for 6.09 million new subscribers.
With regards to new streaming players like Apple and Disney, Netflix noted, “We don’t anticipate that these new entrants will materially affect our growth because the transition from linear to on demand entertainment is so massive and because of the differing nature of our content offerings,” as quoted by CNBC. “We believe there is vast demand for watching great TV and movies and Netflix only satisfies a small portion of that demand.”