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Netflix Could Be in Trouble

Year to date, shares of Netflix (NFLX) are down 11%. The streaming video association reports gain after a tighten Monday. It might be time to change a channel on Netflix. 

I have been a large Netflix bear for a while. On Jul 18, Netflix reported second-quarter gain of 9 cents per share, 7 cents improved than a accord estimate. Revenue rose 19.5% to $1.97 billion.

Despite a gain beat, Netflix missed on each domestic and general subscriber metric. Second-quarter net domestic additions were 0.16 million contra a 0.50 million guidance. International net adds were 1.52 million vs. superintendence of 2 million.

Churn increasing 20 basement points. Management blamed a increasing shake on media reports that a association was formulation cost hikes on some users. Contribution margins were 34.3%, somewhat forward of superintendence and adult 120 basement points year over year.

The association finished a second entertain with handling income of $70 billion and net income of $41 million. Netflix increasing a calm requirement by $900 million sequentially to $13.2 billion. Management pronounced it skeleton to spend as most as $5 billion on calm in mercantile 2016 and $6 billion in 2017.

Management won’t have to worry about money upsurge anytime soon. The association reported it burnt by $254 million in (negative) giveaway money flow.

While investors were still perplexing to process a unsatisfactory net supplement numbers, government cut superintendence for a third quarter. The association pronounced it expects net adds of 2 million, down from prior expectations of 2.70 to 2.85 million. For comparison, first-quarter adds were 4.51 million.

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