© Reuters. FILE PHOTO: The Netflix logo is shown on one of their Hollywood buildings in Los Angeles, California, U.S., July 12, 2023. REUTERS/Mike Blake/File Photo
By Lisa Richwine
LOS ANGELES (Reuters) -Netflix Inc beat Wall Street earnings forecasts for the second quarter on Wednesday but fell short on revenue even as a password-sharing crackdown helped the company pick up 5.9 million new streaming TV customers.
Shares of the streaming video pioneer were down 4.3% in after-hours trading at $457.00.
Netflix (NASDAQ:)’s projection for third-quarter revenue also fell short of analyst estimates. The company said it expected revenue growth to accelerate in the second half of the year.
“While we’ve made steady progress this year, we have more work to do to reaccelerate our growth,” the company said in its quarterly letter to shareholders.
Netflix said it planned to kick-start revenue growth by “creating a steady drumbeat of must watch shows and movies; improving monetization; growing the enjoyment of our games; and investing to improve our service for members.”
The company reported diluted earnings-per-share of $3.29 for the second quarter, ahead of the $2.86 consensus forecast of analysts surveyed by Refinitiv.
Its nearly 6 million subscriber additions outpaced the 1.9 million that Wall Street expected.
Netflix has been looking for new ways to make money as streaming competition intensifies and it nears market saturation in the United States. The company launched a cheaper tier with advertising last November, and started asking password borrowers to pay in a widespread crackdown that rolled out in May.
Quarterly revenue climbed 2.7% from a year earlier to $8.2 billion, shy of analyst forecasts of $8.3 billion. The company estimated third-quarter revenue would hit $8.5 billion. Wall Street had been forecasting $8.7 billion.
Net income for the second quarter topped estimates at $1.5 billion.
The company, like its competitors, is grappling with strikes by tens of thousands of Hollywood actors and writers. The labor action has forced many film and television productions to shut down, though analysts say Netflix has an advantage because of its global production.
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