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Netflix misses forecasts for Q3 net new adds, sales and earnings

Wed 21 October 2020 12:15 | A A A

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(Sharecast News) - Netflix missed analysts' estimates for new subscriber additions and earnings in the third quarter, sending the streaming video giant's stock duly lower.

The company added 2.2m net new subscribers over the three months ending in September.

That was lower than the company's own guidance for 2.5m net new adds, which in any case would have marked a sharp slowdown versus the 10m-plus adds seen in each of the previous two quarters.

Sales and net earnings per share both continued to grow, rising to $6.44bn and $1.74, respectively, from $5.25bn and $1.47 one year earlier.

The consensus from FactSet however was for $6.39bn and $2.13.

Guidance for net new additions in final stretch of the year also came in lower than anticipated, at 6.5m, against forecasts on the Street for 6.56m.

In a letter sent to shareholders, the firm also pointed out that net new adds were expected to decline in the front half of 2021 versus the comparable year earlier period.

"The state of the pandemic and its impact continues to make projections very uncertain, but as the world hopefully recovers in 2021, we would expect that our growth will revert back to levels similar to pre-COVID."

As of 1205 BST, shares of Netflix were falling 5.87% to $494.6.

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