Netflix Shares Dived 20% on Drop in Subscribers, Slower Revenue in 1Q

By Denny Jacob

Netflix Inc. shares fell 20% to $277.03 in after hours Tuesday after the company said that it lost subscribers and that revenue growth has slowed considerably in the first quarter, raising concerns about the streaming giant's ability to attract new users amid a return to prepandemic conditions and greater competition.

The Los Gatos, Calif.-based company reported a profit of $1.6 billion, or per-share earnings of $3.53, for the quarter compared with a profit of $1.71 billion, or per-share earnings of $3.75, in the same quarter a year ago. Analysts polled by FactSet expected $2.90 a share.

Revenue rose 10% to $7.87 billion from $7.16 billion. Analysts polled by FactSet expected $7.93 billion.

The company lost 200,000 subscribers from the prior quarter, below its own projection of adding 2.5 million customers in the period. The decline brought Netflix's paid global subscriber base to 221.6 million, down from 221.8 million. It added that it expected to lose 2 million subscribers in the current quarter.

Worldwide, Netflix said its business in Central and Eastern Europe were hit by Russia's attack on Ukraine. It said shutting down its service in Russia also resulted in the loss of 700,000 subscribers.

Netflix blamed password sharing among its members and increased competition in the streaming space for creating what it called "revenue growth headwinds."

Write to Denny Jacob at [e-mail]

(END) Dow Jones Newswires

April 19, 2022 16:25 ET (20:25 GMT)

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