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Video Streamer Netflix Loses 'Just' 1 Million Subscribers, Stock Jumps

PATRICK SEITZ04:33 PM ET 07/19/2022

Internet television network Netflix (NFLX) late Tuesday reported a better-than-feared subscriber total for the second quarter. Netflix stock jumped in extended trading.

The Los Gatos, Calif.-based company lost 970,000 subscribers in the June quarter. Three months ago, Netflix predicted it would lose 2 million subscribers in the second quarter following price hikes and amid heightened competition. Analysts polled by FactSet were in line with that target. In the first quarter, Netflix reported a surprise loss of 200,000 subscribers, its first subscriber loss in a decade.

Netflix ended the June quarter with 220.67 million subscribers worldwide.

The company earned $3.20 a share on sales of $7.97 billion in the second quarter. Wall Street had modeled Netflix earnings of $2.95 a share on sales of $8.03 billion. On a year-over-year basis, Netflix earnings rose 8% while sales grew 9%.

Netflix Stock Rallies

In after-hours trading on the stock market today, Netflix stock surged 6.4% to 214.62. During the regular session Tuesday, Netflix stock jumped 5.6% to 201.63 during a rally day for stocks.

For the current quarter, Netflix predicted adding 1 million subscribers. But analysts were looking for 1.41 million new subscribers in the third quarter.

Netflix forecast third-quarter earnings of $2.14 a share on sales of $7.84 billion. That missed Wall Street's targets of $2.75 in earnings per share on $8.09 billion in sales.

Netflix's second-quarter results and third-quarter guidance were crimped by the strong U.S. dollar. Foreign exchange rates cut its second-quarter revenue by $339 million, the company said. In constant currency, Netflix revenue rose 13% in the June quarter.

Last week, Netflix chose Microsoft (MSFT) as its advertising technology partner for an upcoming lower-priced, ad-subsidized service level.