Netflix Issues Gloomy Outlook

Netflix Inc dashed hopes for a quick rebound after forecasting weak first-quarter subscriber growth on Thursday, sending shares sinking nearly 20% and wiping away most of its remaining pandemic-fueled gains from 2020.

Reuters reports the world's largest streaming service projected it would add 2.5 million customers from January through March, less than half of the 5.9 million analysts had forecast, according to Refinitiv IBES data.

Netflix tempered its growth expectations, citing the late arrival of anticipated content, such as the second season of "Bridgerton" and the Ryan Reynolds time-travel movie "The Adam Project."

Shares of Netflix plummeted nearly 20% to $408.13 in after-hours trading. Competitor Walt Disney Co, which has staked its future on building a strong streaming business, saw its shares sink 4%. Streaming device Roku Inc fell 5%.

Netflix added 8.3 million customers from October to December, when it released a heavy lineup of new programming including the star-studded movies "Red Notice" and "Don't Look Up" and a new season of "The Witcher." Industry analysts had projected 8.4 million.

The company's global subscriber total at the end of 2021 reached 221.8 million.

In a letter to shareholders, Netflix said it believed the ongoing COVID-19 pandemic and economic hardships in several parts of the world like Latin America may have kept subscriber growth from rebounding to levels seen before the pandemic.

COVID "created a lot of bumpiness" that made it hard to project subscriber numbers, "but all the fundamentals of the business are pretty solid," Co-Chief Executive Ted Sarandos said in a post-earnings video interview.

Netflix last week raised prices in its biggest market, the United States and Canada, where analysts say growth is stagnating, and is now looking for growth overseas.