Netflix Earnings: NFLX Stock Falls 10% on Massive Q2 EPS Miss

Netflix (NASDAQ:NFLX) earnings for the video streaming company’s second quarter of 2020 have NFLX stock falling hard after-hours Thursday. That’s due to its diluted earnings per share of $1.59 completely missing Wall Street’s estimate of $1.81. However, its revenue of $6.15 billion is better than analysts’ estimates of $6.08 billion.

Netflix Earnings: NFLX Stock Falls 10% on Massive Q2 EPS Miss
Source: XanderSt /

Let’s take a deeper dive into the most recent Netflix earnings report below.

  • Diluted per-share earnings are up 165% from 60 cents during the same time last year.
  • Revenue for the quarter comes in 25% higher than the $4.92 billion reported in Q2 2019.
  • Operating income of $1.36 billion is a 92.5% increase year-over-year from $706.42 million.
  • The Netflix earnings report also includes a net income of $720.2 million.
  • That’s a 166.1% jump from its net income of $270.65 million in the same period of the year prior.
  • NFLX also added 10.1 million paid subscribers in Q2 compared to 2.7 million in the second quarter of the previous year.

Netflix includes the following statement in its letter to shareholders.

“In Q1 and Q2, we saw significant pull-forward of our underlying adoption leading to huge growth in the first half of this year (26 million paid net adds vs. prior year of 12 million). As a result, we expect less growth for the second half of 2020 compared to the prior year.”

Netflix also provides guidance for Q3 2020 in its earnings report. The company is expecting a diluted EPS of $2.09 on revenue of $6.327 billion. Wall Street is estimating diluted EPS of $2 and a revenue of $6.39 billion for the period.

NFLX stock was down 10.4% after markets closed on Thursday.

As of this writing, William White did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

©2021 InvestorPlace Media, LLC