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Netflix stock falls after subscriber outlook misses expectations

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Yahoo Finance's Jared Blikre details Netflix's stock drop-off at the market's close amid its earnings reports showing misses on subscriber and growth estimates.

Video Transcript

- Head over to Yahoo Finance's Jared Blikre, standing by with breaking news on Netflix's earnings. And Jared, that stock is down. What's the cause?

JARED BLIKRE: Yes. The outlook for subscriber is pretty weak here. I'm looking for the first quarter. Now this is the current quarter projection. They're saying that they're going to add 2.5 million subscribers. The estimate was for many times that, 6.26 million. So that is the headline number that we're looking at after that big headline miss.

The stock right now, you're looking at a chart on the YFi interactive of Netflix stock. You're not seeing the market's reaction here. But it is right down to 450. And that is that round number that has been in play before, so some pretty significant declines here for Netflix. Let me go over some of the other numbers here. Fourth quarter revenue came in exactly in line, $7.71 billion, fourth quarter EPS coming in at $1.33, handily beating the estimate from the street of $0.81.

But again, that streaming paid and that change number of 2.5 million projected for the first quarter, really a big disappointment. Also seeing, let's see, we have fourth quarter global streaming, paid net additions for the fourth quarter. Those came in at 8.28 million. And I believe the estimate was for a bit lower than 8.13 million, so managed to beat on the fourth quarter numbers, but just not on the projection.

Also looking at a total US and Canada streaming paid memberships of 75.2 million, and then you go to the paid memberships for the first quarter, and again, that's coming in at 224.3 million. Also "Squid Games," got some news here. They decided to comment about that. They had 1.65 billion hours viewed in four weeks. That is an incredible amount. I think I'm included in that total as well.

And they're also seeing a positive free cash flow for the full year 2022 and beyond. But it's really that headline subscriber number and the projection for it that really missed expectations here, again, the stock down about 10% in after hours trading to the lowest levels we've seen since about mid 2020, guys.

- All right, Yahoo Finance's Jared Blikre, thank you so much.