Nasdaq 100: Netflix shares tumble, but recover following video conference call

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Comments from the board seemed to soothe what had been a big negative reaction to first quarter earnings after the bell last night. This was followed by an immediate snapback after co-chief executive gave an upbeat outlook.

 

 Jeremy Naylor | Analyst, London | Publication date: Wednesday 19 April 2023

Netflix Q1 earnings

The Nasdaq-listed streaming giant Netflix is up and running this morning all-sessions on the IG platform after last night having a rollercoaster ride after it beat Wall Street first quarter (Q1) earnings per share estimates by a whisker.

But then came concerns about the outlook and then came a recovery.

Let's take a look at the numbers - it posted earnings of $2.88 per share, two cents higher than forecast, with revenue coming in broadly in line at just shy of $8.2 billion.

Now from January through to March, Netflix added one and three quarter million streaming subscribers missing analyst estimates of just over two million additions. But it's not that, that it wants to be measured by, it wants to be measured by revenues. It forecasts eight and a quarter billion in revenue, diluted earnings per share at $2. 86 - analysts expected on average 8.5 billion for revenue and just over $3 per share on earnings per share.

Share price chart

Let's take a look at what happened in terms of the share price movement last night.

You can see clearly on this daily chart here if I transfer this onto a one hour chart. You can see the point at which it reported those earnings and that first power of trade was a stunning loss of almost 12% in total value of the company. Then came the rebound. The company price initially dropped in extended trade but recovered those losses in a matter of 40 minutes or so lifted by an upbeat post earnings video interview where the co-chief executive, Ted Sarandos said Netflix is growing and is profitable. He said they have a clear path to accelerate growth in both revenue and profit and are executing it.

Back to the daily chart just to look at where we're going from here. Despite the fact we broke this rising line of support that we've seen since the 13th of July last year, I think this still is in place and in the longer term, measuring what we heard from the chief executive last night, longer term, the company is expecting to see more appreciable growth.