Netflix projected third-quarter revenue that fell short of Wall Street estimates, suggesting a crackdown on password sharing and a new advertising tier aren’t yet delivering the sales growth analysts anticipated.
Netflix Inc. projected third-quarter revenue that fell short of Wall Street estimates, suggesting a crackdown on password sharing and a new advertising tier aren’t yet delivering the sales growth analysts anticipated.
The results were fine “but not enough to move the stock higher given the move in past three months,” LightShed Partners analyst Rich Greenfield said after the results were announced.It will take several quarters to realize the financial benefits of paid sharing, co-Chief Executive Officer Greg Peters said Wednesday.
The plan has been controversial with users, and analysts weren’t sure how it would impact the company’s growth. Netflix had long said it didn’t care if people used someone else’s account. But the company said new sign-ups are already exceeding cancellations and that sales growth will accelerate in the months ahead, with third-quarter growth projected at 7.5%.
“While streaming is intensely competitive, we’ve shown that with strong execution and focus, it can be a great business,” the company said its its letter.
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