Netflix beats 3rd-quarter earnings estimates, says viewer engagement remains healthy
- Net income rises to $3.66 billion as revenue grows nearly 12%; streamer narrows full-year revenue outlook
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- Net income rises to $3.66 billion as revenue grows nearly 12%; streamer narrows full-year revenue outlook
By Mucahithan Avcioglu
ISTANBUL (AA) - Netflix reported third-quarter earnings above market expectations Tuesday, while revenue matched forecasts, as the streaming company sought to reassure investors about viewer engagement.
Earnings per share reached $0.87 for the quarter that ended on Sept. 30, exceeding analysts' expectations.
Revenue rose nearly 12% year-on-year to $12.87 billion, in line with estimates, supported by membership growth and subscription price increases introduced in March.
Net income climbed to $3.66 billion from $2.55 billion a year earlier, while earnings per share increased from 59 cents. Netflix said the rise in profit partly reflected the timing of expenses.
The company said customers’ response to its price increases was consistent with previous changes and its expectations.
For the fourth quarter, Netflix forecast revenue of $13.44 billion, representing growth of more than 11%, driven by memberships, pricing, and advertising.
It also narrowed its full-year revenue outlook to $51.1 billion, equivalent to annual growth of 13%, from its previous forecast range of $51 billion to $51.4 billion.
- Competition for consumers
Addressing investor concerns about viewing trends, Netflix said engagement remained healthy despite intense competition for consumers’ attention.
“We know there’s some investor concern about our view hours growth,” the company said in its shareholder letter.
It said engagement encompasses the quantity, quality, and variety of viewing, adding that it continues to deliver strong value to subscribers.
Netflix outlined three priorities to accelerate growth in viewing hours: offering more entertainment value, using technology to improve its service, and strengthening monetization.
The results followed organizational changes announced last week, including plans to cut about 1,000 jobs, or roughly 6% of its workforce.
Bela Bajaria is departing as chief content officer, with former Disney executive Peter Rice named to succeed her.
Mücahithan Avcıoğlu