U.S. Markets open in 6 hrs 32 mins

'Stranger Things' could've saved Netflix's disappointing quarter

Netflix ( NFLX ) shares took a dive after the company released its second quarter earnings report . The streaming service reported that it added just 2.7 million paid subscribers worldwide during the period, missing analysts’ expectations calling for 4.8 million subscribers.

The stock fell 10.2% on Thursday.

The results may have worried investors dealing with the loss, but some analysts say it’s really no cause for major concern.

“Netflix has a history of beating big and missing big,” said BTIG Managing Director Richard Greenfield. “I think this is a typical overreaction that is followed by strong growth in the stock that you’ve seen when they’ve missed like this before.”

Some of the subscriber fall-off could be due to Netflix’s price increase from $10.99 to $12.99. But as Greenfield pointed out, over 99% of subscribers in the U.S. are not bothered by the prices enough to cancel out on the company.

He says it is possible that the numbers could have been higher had the release of Stranger Things season 3 timed better with the second quarter earnings report.

“If Stranger Things had come out the last week of the quarter, would they have beaten numbers? It’s very possible,” Greenfield said.

In its Q2 letter to shareholders, Netflix management addressed the Q3 release of the hit show saying “the first two weeks of Q3 are strong”

Homepage of Netflix, a popular media streaming website.

“To view the one quarter of negative when the whole year is gonna add four to five million subscribers at twenty percent higher pricing, show me another service,” he told Yahoo Finance’s On The Move .

Streaming Competition Queues Up

Greenfield says that investors should really be paying attention to Netflix's global expansion on the streaming market in Asia, due largely in part to its move producing original content programs relevant to a region’s entertainment interest.

“The first six months of the year has been a pretty incredible story for Netflix on a global basis,” Greenfield said, going on to note the company’s international subscriber growth. “Their competitors are all now saying ‘We need to be in this business. We need to get started and get going.’ And they’re all rushing to get into the streaming business.”

Media giants Disney and Apple are set to introduce streaming services later this year. HBO Max, a newly announced service, is set to launch in Spring 2020.

“The reality is the long-term trend is linear television is shifting to internet television. Netflix has been crushing that. They’re the leader in this category. They’ve defined the category. Everyone is trying to play catch-up now.”

-

Marabia Smith is a producer for Yahoo Finance On the Move.

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter , Facebook , Instagram , Flipboard , SmartNews , LinkedIn , YouTube , and reddit .


  • TomTom N.V. (AMS:TOM2): What Does Its Beta Value Mean For Your Portfolio?
    Business
    Simply Wall St.

    TomTom N.V. (AMS:TOM2): What Does Its Beta Value Mean For Your Portfolio?

    Beta can be a useful tool to understand how much a stock is influenced by market risk (volatility). However, Warren Buffett said 'volatility is far from synonymous with risk' in his 2014 letter to investors. So, while useful, beta is not the only metric to consider.

  • Life, liberty and the pursuit of returns: There’s an ETF for that
    Business
    MarketWatch

    Life, liberty and the pursuit of returns: There’s an ETF for that

    It's freedom that allows the emerging markets of yesterday to become the developed markets of today. Now, nearly two decades later, Tolle's passion is an investable idea. In May, a company she founded, Life + Liberty Indexes, launched an exchange-traded fund to allow anyone access to its strategy: “Human and economic freedom metrics as primary factors in the investment selection process.

  • A Holistic Look At Zogenix, Inc. (NASDAQ:ZGNX)
    Business
    Simply Wall St.

    A Holistic Look At Zogenix, Inc. (NASDAQ:ZGNX)

    Today I've chosen to put the spotlight on Zogenix, Inc. (NASDAQ:ZGNX) due to its excellent fundamentals in more than one area. ZGNX is a company with robust financial health as well as an optimistic future outlook. For those interested in digging a bit deeper into my commentary, take a look at the report on Zogenix here.

  • Read This Before Buying Baker Hughes, a GE company (NYSE:BHGE) For Its Dividend
    Business
    Simply Wall St.

    Read This Before Buying Baker Hughes, a GE company (NYSE:BHGE) For Its Dividend

    Today we'll take a closer look at Baker Hughes, a GE company (NYSE:BHGE) from a dividend investor's perspective. On the other hand, investors have been known to buy a stock because of its yield, and then lose money if the company's dividend doesn't live up to expectations. In this case, Baker Hughes a GE pays a decent-sized 3.4% dividend yield, and has been distributing cash to shareholders for the past two years.

  • When is Apple going to release something more than a slightly nicer iPhone?
    Business
    Quartz

    When is Apple going to release something more than a slightly nicer iPhone?

    September is nearly here, which brings such certainties as shorter days, cooler nights, and the announcement of Apple gadgets. The company traditionally holds an event in the first or second week of the month, which in recent years has generally been when the world is introduced to its latest iPhone, and whatever other new gadgets Apple has been working on. But it's been a while—with your definition of “a while” correlating to how impressed you are by recycled gadget ideas—since Apple has come out with something truly unique.

  • Salesforce revenue forecast beats estimates
    Business
    Yahoo Finance Video

    Salesforce revenue forecast beats estimates

    Salesforce shares rallied after the company's quarterly results topped Wall Street estimates. Yahoo Finance's Emily McCormick joined The Final Round to discuss.

  • Tesla to Agree to Buy Batteries From LG for China Factory
    Business
    Bloomberg

    Tesla to Agree to Buy Batteries From LG for China Factory

    Tesla Inc. agreed to buy batteries from South Korea's LG Chem Ltd. to be used in electric vehicles produced out in China, according to people familiar with the matter. Batteries made by LG Chem will be used initially in Model 3 cars manufactured in the plant near Shanghai, Tesla's first outside of the U.S, said the people, asking not to be identified discussing a private matter.

  • Business
    Reuters

    UPDATE 1-Splunk to buy cloud software firm SignalFx in $1 bln deal

    Data analytics software maker Splunk Inc on Wednesday said it would acquire privately held SignalFx, which makes software for the cloud, in a cash and stock deal for about $1.05 billion. Splunk hopes the deal will boost its capabilities by allowing its customers to use SignalFx products to monitor their data centers and applications in real-time. "The acquisition of SignalFx squarely puts Splunk in position as a leader in monitoring and observability at massive scale," Splunk's Chief Executive Officer Doug Merritt said in a statement.

  • Tesla Gigafactory: China Provides Vital Certificate
    Business
    Market Realist

    Tesla Gigafactory: China Provides Vital Certificate

    Tesla's Gigafactory 3 in Shanghai  Many businesses have been impacted by the ongoing trade war between the US and China. Tesla (TSLA) is building a Gigafactory 3 in Shanghai, China, to offset some of the tariffs and expand its reach. Tesla wants to supply its most affordable Model 3 to Chinese consumers.

  • Boeing locks $1B contract to re-wing A-10 fighters
    Business
    American City Business Journals

    Boeing locks $1B contract to re-wing A-10 fighters

    Boeing Co. (NYSE: BA) secured a $999 million contract Wednesday to provide wing replacements for more than 100 A-10 Thunderbolt II fighters for the Air Force.  The contract is part of a massive refurbishment of the close air support aircraft fleet, which has been in service since the 1970s.  The indefinite-delivery/indefinite-quantity contract has a performance period of roughly 11 years and calls on the Chicago-based aircraft company to provide 112 new A-10 wing assemblies and up to 15 wing kits. The contract continues Air Force efforts to re-wing its entire A-10 fleet of more than 280 fighters. Boeing won a previous re-wing contract in 2007, which was set to expire in fiscal 2018 with some reports saying that the Air Force was looking for other vendors to complete work on the aircraft.

  • Trump attacks Ford Motor for not backing fuel economy rollback
    Politics
    Reuters

    Trump attacks Ford Motor for not backing fuel economy rollback

    U.S. President Donald Trump stepped up a series of attacks on automakers on Wednesday for not backing his administration's plan to roll back Obama-era fuel efficiency rules, singling out Ford Motor Co in particular for backing a deal with California for stricter fuel economy standards. Ford is one of four automakers, along with Honda Motor Co , BMW AG and Volkswagen AG , that reached a voluntary agreement with California on fuel efficiency rules, defying Trump and his administration's effort to strip the state of the right to fight climate change by setting its own standards.

  • Amid Cord-Cutting, Dish Sues to Seal Revenue Loophole
    Business
    Market Realist

    Amid Cord-Cutting, Dish Sues to Seal Revenue Loophole

    Cord-cutting has greatly diminished Dish Network's (DISH) core television broadcast business, and could continue to do so. In the second quarter, Dish lost 31,000 pay-TV customers as viewers shifted to online content, and its revenue fell year-over-year to $3.2 billion from $3.5 billion. It lost 259,000 pay-TV customers in the first quarter.

  • Dozens of Airbus A380s face urgent checks after cracked part dug from ice
    Business
    Reuters

    Dozens of Airbus A380s face urgent checks after cracked part dug from ice

    Investigators probing an engine explosion on an Air France A380 in 2017 are studying a possible manufacturing flaw in a recently salvaged cracked part in a move likely to trigger urgent checks on dozens of Airbus superjumbos, people familiar with the matter said. The titanium alloy part is the centrepiece of a 3-metre-wide fan on engines built for the world's largest airliner by U.S.-based Engine Alliance, co-owned by General Electric and United Technologies unit Pratt & Whitney . It had sat buried in Greenland's ice sheet since September 2017 when one of four engines on Air France flight 66 abruptly disintegrated en route from Paris to Los Angeles.

  • Greenland has serious problems. A Trump deal isn’t one of them.
    Politics
    Quartz

    Greenland has serious problems. A Trump deal isn’t one of them.

    Greenland, which is not green but icy, was so named by an Icelandic exile hoping to attract settlers. Now the ice is melting and citizens of the autonomous Arctic territory, which US president Donald Trump wants to purchase from Denmark, are on the frontlines of climate change, watching as their way of life melts away. On Aug. 20, Trump canceled plans to visit Denmark next month, ostensibly because the country's authorities have rebuffed any possible discussion of selling Greenland.

  • What Do Analysts Think About Wingstop Inc.'s (NASDAQ:WING) Growth?
    Business
    Simply Wall St.

    What Do Analysts Think About Wingstop Inc.'s (NASDAQ:WING) Growth?

    Overall, analyst forecasts seem fairly subdued, with profits predicted to rise by 20% next year against the higher past 5-year average growth rate of 26%. Presently, with latest-twelve-month earnings at US$22m, we should see this growing to US$26m by 2020. Below is a brief commentary on the longer term outlook the market has for Wingstop.

  • What the Departure of CEO Dion Weisler Means for HP
    Business
    Bloomberg

    What the Departure of CEO Dion Weisler Means for HP

    Dan Morgan, Synovus Trust senior portfolio manager, and Bloomberg's Ian King react to the departure of HP Inc. Chief Executive Officer Dion Weisler and discuss what it means for the future of the company. They speak with Bloomberg's Emily Chang on "Bloomberg Technology."

  • Business
    Bloomberg

    Fannie-Freddie Revamp Risks Destabilizing Economy, Democrat Says

    The Senate Banking Committee's top Democrat is warning the Trump administration that carrying out its plan for ending U.S. control of Fannie Mae and Freddie Mac could destabilize the economy if it fails to protect the housing market. Senator Sherrod Brown of Ohio in a Thursday statement pointed to multiple hearings the committee has held this year, during which both Democrats and housing experts cautioned that freeing the mortgage giants from government conservatorship without major reform would be risky. Failing to listen to these important voices does a disservice to communities and puts our housing market and taxpayers at risk,” Brown said in the statement.

  • Is Entercom Communications Corp.'s (NYSE:ETM) CEO Overpaid Relative To Its Peers?
    Business
    Simply Wall St.

    Is Entercom Communications Corp.'s (NYSE:ETM) CEO Overpaid Relative To Its Peers?

    David Field has been the CEO of Entercom Communications Corp. (NYSE:ETM) since 2002. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. According to our data, Entercom Communications Corp. has a market capitalization of US$526m, and pays its CEO total annual compensation worth US$3.5m.

  • Ford: Vanguard, BlackRock, and State Street Raise Holdings
    Business
    Market Realist

    Ford: Vanguard, BlackRock, and State Street Raise Holdings

    The Vanguard Group, BlackRock Institutional Trust Company, and State Street Global Advisors raised their holdings in Ford (F) stock in the second quarter. Notably, seven of the top ten holders in the stock have increased their stakes. Usually, rising institutional holding implies a favorable opinion on a stock.

  • PBOC to Pass Up Next Chance to Cut Borrowing Costs, Survey Shows
    Business
    Bloomberg

    PBOC to Pass Up Next Chance to Cut Borrowing Costs, Survey Shows

    Policy makers unveiled the revamp of its rate system this month centered around an improved market benchmark, the Loan Prime Rate, and argued that the reform alone would help lower borrowing costs to the real economy. “I think the central bank will lower the MLF interest rate within a quarter, but it may not do it right now,” said Wang Yifeng, chief banking analyst at Everbright Securities Co. in Shanghai. Liquidity is ample, and banks' willingness to borrow MLF is not strong, he said, adding that the transmission effect of a slightly lower LPR remains to be seen.

  • Business
    Motley Fool

    Why GameStop, Bed Bath & Beyond, and Pure Storage Jumped Today

    GameStop gets a vote of confidence Shares of GameStop jumped 9.5% after the video game retailer received positive comments from an unlikely source. Michael Burry, who's best known for his correct predictions about the subprime mortgage market in the mid-2000s, said that the company is in much better shape financially than its share price would suggest, pointing to sources of cash flow that investors aren't valuing fully. Burry's investment firm has purchased a substantial position in GameStop.

  • 3 Days Left Until Johnson & Johnson (NYSE:JNJ) Trades Ex-Dividend
    Business
    Simply Wall St.

    3 Days Left Until Johnson & Johnson (NYSE:JNJ) Trades Ex-Dividend

    Johnson & Johnson's next dividend payment will be US$0.95 per share, on the back of last year when the company paid a total of US$3.80 to shareholders. Calculating the last year's worth of payments shows that Johnson & Johnson has a trailing yield of 2.9% on the current share price of $131.53. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends.

  • 3 Top Healthcare Stocks to Buy Right Now
    Business
    Motley Fool

    3 Top Healthcare Stocks to Buy Right Now

    Healthcare stocks have been on a roller coaster ride this year. The global trade war, U.S. politics, and a seemingly less permissive Food and Drug Administration (FDA) have all taken on a toll on the sector in 2019. With this theme in mind, we asked three of our Motley Fool contributors for their top healthcare stock picks.

  • Why Splunk Stock Dropped Today
    Business
    Motley Fool

    Why Splunk Stock Dropped Today

    Splunk said Wednesday that its fiscal second-quarter revenue soared 33% year over year to $516.6 million, translating to adjusted earnings of $46.6 million, or $0.30 per share. By comparison, Splunk's guidance called for lower revenue of $485 million, and most analysts were looking for significantly lower earnings of $0.12 per share. So what Splunk added nearly 500 new enterprise customers during the quarter, including the likes of ABB, Verizon Media Group, and Zoom Communications.

  • Here's What You Should Know About AbbVie Inc.'s (NYSE:ABBV) 6.3% Dividend Yield
    Business
    Simply Wall St.

    Here's What You Should Know About AbbVie Inc.'s (NYSE:ABBV) 6.3% Dividend Yield

    Today we'll take a closer look at AbbVie Inc. (NYSE:ABBV) from a dividend investor's perspective. Unfortunately, it's common for investors to be enticed in by the seemingly attractive yield, and lose money when the company has to cut its dividend payments. With a goodly-sized dividend yield despite a relatively short payment history, investors might be wondering if AbbVie is a new dividend aristocrat in the making.