How Is Netflix Faring after Its 1Q18 Results?



Netflix in 1Q18

Netflix (NFLX) announced its 1Q18 results on April 16, 2018, and posted slightly better-than-expected earnings and revenues. In 1Q18, Netflix posted adjusted earnings of $0.64 per share, exceeding analysts’ consensus of $0.63 per share. The company posted total revenues of $3.7 billion, slightly better than the estimate of $3.69 billion. Its earnings and revenues increased ~60.0% and ~40.0% year-over-year, respectively.

The streaming giant added ~7.4 million subscribers in 1Q18, with total global subscribers of 125.0 million. Its subscriber additions crushed the analysts’ forecast of 6.5 million subscribers.

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Netflix’s rise in stock price despite Facebook concerns

Netflix’s (NFLX) stock price closed at $307.78 on April 16, down 1.2% for the day. The company’s stock closed up more than 6.0% in after-hours trading after the earnings announcement. 

Year-to-date (or YTD), Netflix’s stock price has risen more than 60.0%, while the S&P 500 Index was almost flat. Among Netflix’s peers, Comcast (CMCSA) and the Walt Disney Company (DIS) declined 15.5% and 6.7%, respectively, on a YTD basis.

Notably, the recent concerns over Facebook’s (FB) Cambridge Analytica breach had a substantial effect on many tech stocks as well as the broader markets. The issue emerged on March 19 and significantly hurt the stock. 

The so-called FAANG stocks—Facebook, Amazon, Apple, Netflix, and Google parent Alphabet (GOOGL)—fell 16.2%, 3.7%, 4.1%, 5.9%, and 11.6%, respectively, between March 12 and March 29 over Facebook’s data breach issue. The FAANG stocks comprise more than 11.0% of the S&P 500 Index.


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