Netflix's Quarter: Churn, Chips and Caution

摘要

A mixed earnings report pushed Netflix's stock down last week and raised a number of key issues about the SVOD provider's future-its aggressive international expansion, the growing importance of the company's original programming slate and programing costs. But management dismissed sluggish Q3 U.S. subscriber gains as something of a technical fluke, and Wall Street analysts generally agreed. In the wake of the earnings report, many analysts have raised their stock price targets for the company. In a letter to shareholders, CEO Reed Hastings and CFO David Wells noted that the Netflix added only 0.88 million U.S. subscribers-lower than the 1.15 million management had predicted -in Q3.They blamed "slightly higher-than-expected involuntary churn (inability to collect), which we believe was driven in part by the ongoing transition to chip-based credit and debit cards."