December 8, 2022

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Netflix falls like a rock after disappointing numbers

Netflix falls like a rock after disappointing numbers

Netflix revenue came in at $30 billion last year, a $5 billion increase from 2020. Profit before tax ended at $5.8 billion, a sharp increase from $3.2 billion a year earlier, according to a statement from the company shortly after Wall Street closed at 22 Norway time.

However, the share price fell 20 percent, equivalent to about $100 per share, in the aftermarket because the market believed the growth in subscribers was disappointing.

Margins under pressure

The fourth quarter separately also shows much weaker profitability than in previous quarters. Operating margin in the fourth quarter of last year was 8.2 percent versus more than 20 percent in the previous three quarters — much weaker than the 14.4 percent operating margin in the fourth quarter of 2020.

The entertainment giant came out in 2021 with 222 million subscribers. That’s an increase of 8.3 million subscribers in the fourth quarter alone — weaker than the growth of 8.5 million subscribers in the corresponding quarter of 2020.

In a stock exchange announcement, Netflix wrote that competition for consumer time “has intensified in the past 24 months only as entertainment companies around the world develop their own power supplies. Although this additional competition may somewhat affect our marginal growth, we continue to grow in all countries and regions where these new energy options have been launched.”

The company also wrote that “even in a world of increased uncertainty and competition, we are optimistic about our long-term growth prospects,” adding, “We had many breakthroughs in 2021: We had the biggest TV show of the year (Squid Game),” the biggest movie releases of all time (Red Notice, Don’t Look Up) and Netflix was the most Emmy-winning, most-nominated, and most-Oscar-nominated television network at the film studio in 2021.”(Conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using a link that leads directly to our pages. All or part of the Content may not be copied or otherwise used with written permission or as permitted by law. For additional terms look here.

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