Wall Street Firm Downsizes Netflix Domestic Sub Growth13 Jan, 2016 By: Erik Gruenwedel
Maybe there was a reason Netflix expedited global service rollout.
Netflix shares Jan. 13 were down more than 5% after Wall Street firm ITG Research suggested the subscription streaming pioneer’s Q4 domestic subscriber additions will fall below guidance.
ITG reportedly said its expects lower Netflix revenue due in part to the SVOD service adding 1.1 million net subs compared with a company forecast of 1.65 million net subs and market consensus of 1.37 million.
Netflix, which Jan. 6 announced global rollout to an additional 130 countries, missed meeting domestic subscriber estimates in Q3 — underscoring speculation the service’s sub growth lies overseas. Netflix management attributed the lower-than-expected domestic sub growth to an abnormality caused by rollout of new chip technology on subscriber credit cards.
Regardless, Netflix added 880,000 domestic subs compared with a forecast of 1.15 million. Netflix added 2.74 million international subs on a forecast of 2.4 million. It has forecast 3.5 million international net sub additions in Q4.
Netflix reports fiscal results Jan. 19.