Select Page

This won’t help an already nervous market one bit.

Today, April 20, after the close Netflix (NFLX) reported first-quarter subscriber growth way below projections. The stock was down 1.21% in after-hours trading as of 4:30 p.m. New York time.

Revenue of $7.16 billion was slightly above the $7.14 billon expected by Wall Street. And up sharply from the first quarter of 2020 at $5.77 billion.

Earnings per share of $3.75 was well above projections of $2.98 a share and the $1.57 from the first quarter of 2020.

But the good news stopped abruptly at the line for new paid subscriber growth. The company added 3.98 new subscribers in the quarter. That was hugely below the 6.29 million added subscribers expected and the 15.77 million added in the first quarter of 2020.

Everybody on Wall Street and Netflix itself had expected the big drop in new subscribers. The consensus view was that a good part of the huge surge in subscriptions in the first quarter of 2020 was a result of pandemic stay-at-home advice.

But nobody had expected this big a drop now that pandemic restrictions have been eased in most part of the country.

Netflix’s guidance for the second quarter did nothing to quiet Wall Street fears. The company said it anticipates second-quarter paid users will grow by just 1 million, compared to Wall Street’s expectations for 4.44 million.

Now it will be seen how much of the Netflix disappointment slops over to send the price of other stay-at-home stocks on the open tomorrow. The most obvious stock to watch are AT&T (T), the owner of HBO Max, which reached 41 million U.S. subscribers two years ahead of schedule in January 2021 and Disney (DIS), where the Disney+ steaming service reached 100 million global subscribers in March. (Disney does have some offsetting post-vaccine opportunities in its theme parks and ESPN units to offset some slowdown in growth at Disney+.) Other stocks to watch in the next few days include Home Depot (HD) and Lowe’s (LOW), which have seen a jump in sales as a result of homeowners launching more DIY home improvement projects, and Zoom Video Communications (ZM) and other work-from-home companies.