The Death of a brand.
The stock is trading at $85, down from a close of $118.84.
Reports Q3 (Sep) earnings of $1.16 per share, $0.22 better than the Capital IQ Consensus Estimate of $0.94; revenues rose 48.6% year/year to $822 mln vs the $812.9 mln consensus. NFLX reports Q3 net subscribers of 23.79 mln vs approx 24 mln guidance. Total U.S. Subscribers is 23.79 mln up 42% y/y. Net Sub additions falls -0.81 mln down 145% y/y. Co issues downside guidance for Q4, sees EPS of $0.36-0.70 vs. $1.09 Capital IQ Consensus Estimate; sees Q4 revs of $841-875 mln vs. $923.19 mln Capital IQ Consensus Estimate.
Says DVD subs in Q4 will decline sharply which is reflected in guidance due to price change. Weekly rate of DVD cancellations is shrinking; expect future cancellation rates to shrink more modestly. Says that streaming net additions will be negative in october due to the cancellation wave. Expect levels to be flat in November. Overall expect slightly negative streaming net sub additions in Q4. Expects to double spending on content in 2012 from 2011.
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$304 to $85 in a little over 3 months.
They basically said F U to their subscribers, listened to nobody, came up with Qwickster or something.. then revoked it.. and currently have the worst selection of streaming movies ever.
Not too much of a surprise really.
But it didn’t need to happen this way.