Netflix stock dropped in after-hours trading after the video streaming service reported lower-than-expected revenue, despite blowout subscriber numbers.
The internet video service posted $4.19 billion in revenue for the fourth quarter, undershooting the $4.21 billion analysts had expected.
Netflix added 8.8 million subscribers in the last three months of 2018, a record number that beat the company’s own prediction for 7.6 million new customers. The company did especially well overseas, adding 7.31 million subscribers.
Netflix now has 139 million paying subscribers around the world, the service said. More than half of them — 80 million — watched the hit film “Bird Box” in the first four weeks it was available, Netflix said. Its success demonstrates Netflix’s shift into becoming a full-fledged content creator, competing with TV networks and traditional movie studios alike.
“As Netflix delivers more relevant content, we believe this drives share gains and supports pricing power,” Raymond James analyst Justin Patterson wrote in a note.
For the current quarter ending in April, Netflix said it expects revenue in the range of $4.49 billion. Analysts surveyed by Zacks had expected revenue of $4.59 billion.
Netflix shares have climbed 32 percent since the beginning of the year, compared with an almost 5 percent rise for the Standard & Poor’s 500 index. Shares surged on Tuesday after the company announced a price hike of 13 to 18 percent, but the stock fell nearly 5 percent after the close of trading on Thursday, when it issued its most recent financial results.