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Netflix Gloomy Forecast Erases Pandemic Gains

Netflix Inc shattered hopes for a speedy recovery on Thursday by expecting dismal first-quarter subscriber growth, sending shares down nearly 20% and wiping out most of the company’s remaining pandemic-fueled gains from 2020. According to Refinitiv IBES statistics, the world’s largest streaming service expected to attract 2.5 million members from January to March, less than half of the 5.9 million analysts had predicted. Netflix has lowered its growth forecasts

It cites the late release of highly anticipated programming such as the second season of “Bridgerton” and Ryan Reynolds’ time-travel film “The Adam Project.” In after-hours trading, Netflix stock dropped over 20% to $408.13. Walt Disney Co, a competitor that has placed its future on establishing a successful streaming business, saw its stock drop 4%. Nasdaq futures fell about 1%, indicating that traders expect the technology-heavy index to open lower on Friday.

Between October and December, Netflix attracted 8.3 million new subscribers, thanks to a slew of new programming that included the star-studded films “Red Notice” and “Don’t Look Up,” as well as a new season of “The Witcher.” Analysts had predicted a total of 8.4 million. At the end of 2021, the firm had 221.8 million global subscribers. noted in a letter to shareholders that the ongoing COVID-19 epidemic, as well as economic challenges in certain parts of the world, such as Latin America, may have prevented subscriber growth from returning to pre-pandemic levels.

Analyst average projections of 82 cents were smashed by the company’s adjusted earnings per share of $1.33. Revenue came in at $7.71 billion, which was in line with expectations. Netflix boosted rates in its biggest market, the United States and Canada, last week, and is now seeking for growth elsewhere, according to analysts.

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