- Netflix reported its Q1 2020 earnings after the bell on Tuesday.
- Netflix has ranked among analysts' favorite "stay at home" stocks as many have shifted to remote work and new entertainment options during the coronavirus pandemic.
- But some analysts warn consumers will cut subscriptions as they lose jobs or see their salaries cut.
VIDEO1:4101:41Netflix misses Q1 earnings $1.57 vs. $1.65 estimatedClosing Bell
Netflix shares popped more than 5% Tuesday after a big jump in subscriber growth in its Q1 2020 earnings report. The company has seen its stock outperform the market during the coronavirus pandemic as stay-at-home orders have given many consumers more time to explore streaming services.
Here is what Netflix reported:
- Earnings per share (EPS): $1.57
- Revenue: $5.77 billion
- Global paid net subscriber additions: 15.77 million
Wall Street was anticipating earnings per share of $1.65 on revenue of $5.76 billion, based on Refinitiv consensus estimates. Domestic (U.S. and Canada) paid subscriber additions were expected to come in at 775,000 and international paid subscriber additions were expected to be 7.2 million, according to FactSet. However, it's difficult to compare reported earnings to analyst estimates for Netflix's first quarter, as the impact of the coronavirus pandemic on earnings is complicated to assess.
In its letter to shareholders, Netflix said it expects viewership and subscriptions to spike but warned of an expected decline in viewership and slowdown in growth down the road. The company said shows and films it expected to release in the second quarter are still on track to release as planned since their filming had already completed.
Netflix said it would have additional cash on hand as production dates are on pause and that it would make up for some of the loss of content with licenses films and TV series.
Netflix also said that the strength of the U.S. dollar will hurt its international revenue.
Moving beyond the initial phase of the crisis, Netflix will face new issues as content it was scheduled to film has been postponed. Production has ground to mostly a halt as Netflix has committed to spending $150 million to help the industry through the crisis. This includes a $100 million fund to assist workers in the TV and film industry hurt by the crisis and a $30 million donation to third parties and non-profits to assist crew in cast in countries where Netflix has a big production presence.
Netflix released some viewership numbers for popular programs in the quarter. Its reality dating show "Love is Blind" was viewed by 30 million member households, according to Netflix, and its docu-series "Tiger King" was viewed by 64 million member households and original film "Spenser Confidential" was viewed by 85 million member households.
This story is developing. Check back for updates.
Subscribe to CNBC on YouTube.
WATCH: Video game streaming is surging as millions are cooped up inside their homes
VIDEO3:2603:26Video game streaming is surging as millions are cooped up inside their homesThe Bottom Line
Source: cnbc.com