Published: Tue, April 17, 2018
Finance | By Jaime Brady

Netflix reaches 125 million subscribers worldwide

Netflix reaches 125 million subscribers worldwide

Netflix has been focused on garnering more worldwide customers as USA subscriber growth slows amid Streaming media company has been targeting global growth amid competition at home from services including Hulu and Alphabet Inc.'s (NASDAQ:GOOG) YouTube. The Los Gatos, California, company added another 7.4 million video-streaming subscribers during the first three months of the year, ending March with 125 million throughout the world, including almost 57 million in the U.S. The company's quarterly revenue was up 40.3% compared to the same quarter last year. analysts anticipate that Netflix will post 2.74 EPS for the current year. "You have to earn it by doing spectacular content". But as CEO Reed Hastings and other executives answered an analysts' questions on one of Netflix's famously tiresome quarterly calls for investors, the after hours gain shrunk to a 5% gain to $324.32.

The results, including higher earnings and an upbeat forecast, were welcome news to investors.

It was not all sunshine for Netflix in recent months, however, with an announcement by the prestigious Cannes film festival that the company's movies can not compete at the event. The stock is the best entertainer on the S&P 500 this year, increasing over 60%. Loop Capital upped their price target on Netflix from $237.00 to $241.00 and gave the stock a "buy" rating in a report on Tuesday, January 2nd. Vetr lowered Netflix from a "strong-buy" rating to a "buy" rating and set a $212.23 price target for the a report on Monday, December 18th. Netflix shares rose on the news. However, Pachter has yet to see proof that Netflix is able to achieve positive free cash flow- and until he does, his bearish recommendation in a nutshell is to take the gamble elsewhere: "we advise investors to seek more compelling investment opportunities". Netflix has a one year low of $138.66 and a one year high of $333.98.

In February, producer Ryan Murphy agreed to leave 21st Century Fox Inc., where he made "American Horror Story", for a deal at Netflix worth a reported $300 million. Earlier, the company signed Scandal producer Shonda Rhimes, who left her long-time home at Walt Disney's ABC to make shows exclusively for Netflix.

Netflix has told investors it will save money by bringing development and production in-house and avoiding the markups imposed by rival studios. But there's at least one area it's not planning to expand into: news programs.

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Total streaming content obligations grew to $17.9 billion in the first quarter, from $17.7 billion three months earlier, and that doesn't account for the ballooning budget to market shows.

On the marketing side, the company said it is investing in "more marketing of new original titles to create more density of viewing and conversation around each title" in the letter.

The decrease in Spotify's average price per subscriber will make it more hard to turn a profit, something that the company has never done since its inception in 2007. On Monday, the company said it aims to add another 6.2 million subscribers in the second quarter.

The news sent Netflix stocks rising by 6 percent on the Wall Street, and the company with a reported revenue of $3.7 billion in revenue for the same profit, shored up profits totaling $290 million, at the rate of 67 cents per share.

This growing output justifies price increases, Netflix says.

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