© Reuters. The Netflix logo is seen on a TV remote controller, in this illustration taken January 20, 2022. REUTERS/Dado Ruvic/Illustration
By Lisa Richwine
LOS ANGELES (Reuters) -Netflix Inc dashed hopes for a quick rebound after forecasting weak first-quarter subscriber growth on Thursday, sending shares sinking nearly 20% and wiping away most of its remaining pandemic-fueled gains from 2020.
Netflix (NASDAQ:) projected it would add 2.5 million customers from January through March, less than half of the 5.9 million analysts had forecast.
Netflix tempered its growth expectations, citing the late arrival of anticipated content, such as the second season of “Bridgerton,” and the film “The Adam Project.”
The world’s largest streaming service added 8.3 million customers from October to December, when it released a heavy lineup of new programming including the star-studded movies “Red Notice” and “Don’t Look Up” and a new season of “The Witcher.”
Industry analysts had projected Netflix would add 8.4 million, according to Refinitiv IBES data.
The company’s global subscriber total reached 221.8 million at the end of 2021.
In a letter to shareholders, Netflix said it believed the ongoing COVID-19 pandemic and economic hardships in several parts of the world like Latin America may have kept subscriber growth from rebounding to levels seen before the pandemic.
The company posted adjusted earnings per share of $1.33, crushing analyst consensus estimates of 82 cents.
Netflix last week raised prices in its biggest market https://www.reuters.com/technology/exclusive-netflix-raises-monthly-subscription-prices-us-canada-2022-01-14, the United States and Canada, where analysts say growth is stagnating, and is now looking for growth overseas.
The company rode a roller coaster during the pandemic, with steep growth early in 2020 when people were staying home and movie theaters were closed, followed by a slowdown in 2021. Netflix picked up more than 36 million customers in 2020, and 18.2 million in 2021.
Netflix’s subscriber growth in 2022 had been expected to stabilize and return to the pace logged before the pandemic, when it added 27.9 million subscribers in 2019, analysts say. The company’s upcoming slate includes new installments of “Ozark,” “Bridgerton” and “Stranger Things” and a three-part Kanye West documentary.
But competitors including Walt Disney (NYSE:) Co and AT&T Inc (NYSE:)’s HBO Max, are pouring billions into creating new programming to grab a share of the streaming market.
Netflix reported fourth-quarter revenue of $7.71 billion, in line with estimates of $7.71 billion.
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