Netflix Shares Slip As Spending Weighs On Profits

San Francisco, (APP - UrduPoint / Pakistan Point News - 18th Jan, 2019 ) :Netflix shares swung lower Thursday as spending on original shows at the leading streaming television service weighed on quarterly revenue and competition heated up.

Shares sank nearly four percent to $339.70 in after-market trades that followed release of earnings figures that showed the Silicon Valley company logged profit of $134 million on revenue of $4.2 billion in the final three months of last year.

That compared with a profit of $186 million on revenue of $3.3 billion in the same period the prior year.

Netflix ended the year with 139 million paying members worldwide, up 29 million from the start of the year.

"The fact that investors reacted negatively to what amounted to a strong performance indicates the extent to which Netflix has set a high bar," said eMarketer media analyst Paul Verna.

"The bottom line is that Netflix remains the uncontested leader in the subscription video space.

" Netflix beat analyst expectations on subscriber growth and per-share earnings, but missed slightly on revenue, Verna noted.

The company's projected growth in subscribers in the current quarter is higher than previously anticipated, "which bodes well for the company as it prepares to face mounting competition from the likes of Disney, AT&T, and NBC Universal," according to Verna.

Operating margin -- the money a company keeps after expenses -- shrank to 5.2 percent from 7.5 percent in a year-over-year comparison of quarters.

The company said it had expected its margin to dip because of the number of shows that launched in the quarter.

"Our multiyear plan is to keep significantly growing our content while increasing our revenue faster to expand our operating margins," Netflix said in a letter to shareholders released along with the earnings report.