Internet television network Netflix (NFLX) late Tuesday reported a better-than-feared subscriber total for the second quarter. Netflix stock jumped in extended trading.
The Los Gatos, Calif.-based company lost 970,000 subscribers in the June quarter. Three months ago, Netflix predicted it would lose 2 million subscribers in the second quarter following price hikes and amid heightened competition. Analysts polled by FactSet were in line with that target. In the first quarter, Netflix reported a surprise loss of 200,000 subscribers, its first subscriber loss in a decade.
Netflix ended the June quarter with 220.67 million subscribers worldwide.
The company earned $3.20 a share on sales of $7.97 billion in the second quarter. Wall Street had modeled Netflix earnings of $2.95 a share on sales of $8.03 billion. On a year-over-year basis, Netflix earnings rose 8% while sales grew 9%.
Netflix Stock Rallies On Q2 Report
In after-hours trading on the stock market today, Netflix stock surged 6.6% to 215.01. During the regular session Tuesday, Netflix stock jumped 5.6% to 201.63 during a rally day for stocks.
For the current quarter, Netflix predicted adding 1 million subscribers. But analysts were looking for 1.41 million new subscribers in the third quarter.
Netflix forecast third-quarter earnings of $2.14 a share on sales of $7.84 billion. That missed Wall Street’s targets of $2.75 in earnings per share on $8.09 billion in sales.
Netflix’s second-quarter results and third-quarter guidance were crimped by the strong U.S. dollar. Foreign exchange rates cut its second-quarter revenue by $339 million, the company said. In constant currency, Netflix revenue rose 13% in the June quarter.
Targeting Early 2023 For Advertising
The video streamer said popular series’ in the second quarter included “Stranger Things,” “The Umbrella Academy” and “The Lincoln Lawyer.” Hit new movies on the service included “Hustle,” “Senior Year” and “The Sea Beast.”
Late Tuesday, Netflix said it plans to launch that ad-supported service tier in early 2023.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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