According to the company, the decline is due to the struggling subscriber growth projected by the company in the second quarter. The company’s earnings per share (EPS) were $1.59 which was less the projected figure of $1.81. It also posted revenue earnings of $6.15 billion higher than the projected $6.08 billion, according to Refinitiv. Also recording Global paid net subscriber additions of 10.09 million. In Q1, Netflix’s revenues grew by 25 per cent. Netflix reported $1.57 Earnings Per Share (EPS) $5.77 billion in revenue and 15.77 million global paid net subscriber additions. The revenues in Q2 were average considering the surge in subscribers. Its EPS figure was also below the projected $1.81 a $0.24 rise from the Q1 figure which was reported at $1.57. The earnings release also dropped because Netflix had expected to add only 2.5 million subscribers this quarter, or less than half of what Wall Street expected. Going forward in 2020, the company does not project its slate of content to be significantly impacted by production shutdowns created by the pandemic. It expects that current production setbacks will push more of its big titles to the end of 2021, but that the “total number of originals for the full year will still be higher than 2020.” Netflix plans to supplement its original content with other films and shows it’s acquired. The company also slashed its marketing costs by 28 per cent and spent less on content production as television and movie sets were shut down. The upshot was a 92 per cent increase in the operating income and a 163 per cent rise in earnings per share, to $1.63. Netflix co-CEOs Reed Hastings and Ted Sarandos also said in a letter to shareholders that they anticipated a year-on-year slowdown because the pandemic pulled forward demand and new seasons of “Stranger Things” and “Money Heist” that had inflated subscriber growth in the third quarter of 2019. So far, it has resumed some production in Europe as well as two stop-motion animation projects in Oregon and two films in California. But the company still warns that current infection trends create more uncertainty for the productions in the US. Adding that it’s made the most progress resuming production in the Asia Pacific and never fully shut down in Korea. “Parts of the world like India and some of Latin America are also more challenging and we are hoping to restart later in the year in these regions.” the company said. Netflix provided third-quarter revenue guidance of $6.33 billion. It expects third-quarter earnings of $2.09 per share, above analyst estimates of $2.01. The company also expects 2.5 million net subscriber additions for the third quarter, while analysts were expecting 5.27 million.
