The shares of the streaming TV giant Netflix (NASDAQ: NFLX) eased on Friday, dropping 6.2% as the market closed.
The decline was probably partly driven by Friday's general market decline on many growth stocks, including Netflix. However, a decline in the stock price may also reflect some disappointment in the company's third quarter results.
Netflix shares initially jumped after the company's third quarter results, which were released after market close on Wednesday. However, this gain waned during the trading day on Thursday. The stock closed a modest 2.4%, well below the nearly 1
While Netflix outperformed analysts' estimates in some respects – – Earnings per share and international customer growth – Domestic customer growth in the period under review was lower than expected. Friday's price decline may reflect a more cautious outlook for the company as investors consider the impact of the company's inability to record significant customer growth in the US in recent quarters.
Management has potentially contributed to investors' concerns by slipping off The forecast for full-year customer growth reflects a worsening competitive environment. The company had previously anticipated that the net additions to members in 2019 would be higher than in 2018. However, management now expects this year's subscriber growth to be slightly lower than in the previous year. Of course, management can only exercise more caution in its guidance given the uncertainties surrounding how new streaming television services from Apple and Walt Disney will impact the company.
Both companies will start streaming TV services in November.