Netflix Beats On Earnings But Provides Weak Subscriber Guidance
Despite comprehensively beating estimates on diluted EPS, Netflix’s stock went down 10% due to its lackluster subscriber addition guidance. For international markets, guidance for net new additions in Q2 remained below Wall Street’s expectations and for the U.S., the guidance reflected a year over year fall of 45%, indicating a substantial slowdown in the company’s main market.
While Netflix’s operating income declined almost 50% due to a significant increase in the cost of revenue and technology and development expenses, its earnings increased 17% mainly due to the absence of $32 million in interest expenses (Q1 2015) and the addition of $25 million in interest income.
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Have more questions about Netflix? See the links below.
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