Netflix signed up more new paying subscribers than expected during the first quarter, attracting 9.6 million new accounts during the period – the highest add in the company’s history.
But investors shrugged off the good news, sending the stock lower in after-hours trading Tuesday as the streaming giant offered weak guidance for the coming quarter.
The Los Gatos, Calif.-based company reported robust earnings of 76 cents per share, easily beating guidance of 56 cents per share, with revenue coming in at $4.52 billion, outpacing guidance of $4.49 billion. The results marked significant growth from the year-ago quarter, which saw earnings of 64 cents per share on revenue of $3.70 billion.
Tuesday’s results beat Wall Street expectations. Analysts polled by FactSet had estimated earnings of 58 cents per share on revenue of $4.50 billion for the period.
Markets tend to watch Netflix’s new subscriptions as the most reliable indicator of future profitability. For the quarter, the digital entertainment streaming giant brought in a record 9.6 million new paying subscribers, up nearly 16 percent from 8.3 million in the year-ago period.
Despite the strong results, Netflix shareholders were spooked by less than stellar guidance for the second quarter.
Netflix predicted just 5 million new paid subscribers for next quarter, down from 5.5 million in the second quarter of last year. Analysts polled by Factset estimated nearly 6 million net adds in the second quarter.