Netflix's weak fourth-quarter revenues include strong international growth



<p clbad = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Netflix (NFLX) reported weaker-than-expected revenue in his & nbsp;Q4 2018 release of earnings on Thursday. The company said it generated $ 4.19 billion in revenue, which was just below Wall Street expectations of $ 4.21 billion. However, the video streaming giant also earned 30 cents per share for the quarter compared to expectations of 24 cents per share. "Data-reactid =" 15 "> Netflix (NFLX) reported weaker-than-expected revenues in its Results report for the fourth quarter of 2018 On Thursday, the company said it generated $ 4.19 billion in revenue, which was not enough for Wall Street's expectations of $ 4.21 billion, however, the video streaming giant also won 30 cents per share for the quarter, compared to expectations of 24 cents per share.

The company's share price did not react well to the news, falling to 4.6% on Friday. But it seems that many investors are missing the true story of Netflix's profits: the growth of international subscribers.

This is because international growth will be a key driver for Netflix's continued dominance in the video industry in the future. And if it keeps its current pace, it should be well positioned for the future.

<p clbad = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Become global"data-reactid =" 18 ">Become global

According to the earnings release, Netflix added 7.3 million international payment subscribers during the quarter, well above the 6.1 million subscribers that Wall Street expected. In addition, with 1.5 million additional national subscribers joining the service, the company obtained a total of 8.8 million subscribers in the quarter. And that number is going to fall soon. Netflix has already said it expects to add 8.9 million more subscribers in the first quarter of 2019.

According to Michael Olson and Yung Kim of Piper Jaffray, approximately 60% of American households connected to the Internet, but only 15% of the international market. This is easily the biggest growth opportunity for the company, since the saturation in the USA. UU It reaches its maximum point.

The international growth of Netflix subscribers was a big bright spot for the company. Image: Gabby Jones / Bloomberg through Getty Images

Netflix is ​​currently available in 190 countries, but not only offers specific programming for the US. UU To its international subscribers; It also offers shows and films for subscribers in each region. However, the company has no presence in China, which means that a mbadive market is being lost.

However, Netflix has enough room to grow in other parts of the world, and is demonstrating that it is more than capable of doing so.

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<p clbad = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The growth of international users is not the only place where Netflix can be added to your income statement If a silent reaction occurs to the company & nbsp;Recent price increases, although modest.& nbsp; Any indication, Netflix could charge up to $ 15.50 per month for a standard subscription, currently at a price of $ 13, without major problem, according to Piper Jaffray. "data-reactid =" 35 "> The growth of international users is not the only place that Netflix can add to its final balance If the silent reaction to the recent, albeit modest, the company's price increases are an indication , Netflix could charge up to $ 15.50 per month for a standard subscription, currently priced at $ 13, without much trouble, according to Piper Jaffray.

And with premium subscriptions currently at $ 16 per month, it's not out of the question that Netflix can charge $ 20 per month for the ability to transmit 4K content in the future.

These types of increases will become more important as the company continues through cash as it accumulates its original shows and films.

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<p clbad = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Send an email to Daniel Howley at [email protected]; follow him on Twitter on @DanielHowley. Follow Yahoo Finance in Facebook, Twitter, InstagramY LinkedIn.finance.yahoo.com/"data-reactid =" 44 ">Send an email to Daniel Howley at [email protected]ath.com; follow him on Twitter on @DanielHowley. Follow Yahoo Finance in Facebook, Twitter, InstagramY LinkedIn.finance.yahoo.com/


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