Netflix's share price slumps 14 per cent after disappointing second quarter

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Specifically, Netflix is anticipating a net add of 5 million new subscribers for the September quarter, a tad below some analyst projections that saw Netflix bringing 6 million new subscribers on board. The reason behind this is that Netflix is now has a free cash flow of negative $559 million meaning they once again spent more in the second quarter of 2018 than they made.

Earnings per share came in at 85 cents, beating analyst forecasts of 79 cents.

Netflix's explosive growth may be starting to plateau.

As of June 30, Netflix had 130 million subscribers, including 57.4 million in the US. Wall Street watches them closely and even a slight miss can...

"This isn't entirely surprising given rising competition in the video streaming market, where Amazon, Hulu, HBO and others are gaining share of subscription video dollars at Netflix's expense", he added.

Revenue for the quarter came in at $3.91 billion, lower than the $3.94 billion analyst estimate. Analysts were expecting 6.3 million - 1.2 million in the USA and 5.1 million internationally, according to Bloomberg.

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Netflix said in a letter to shareholders that it had overestimated the rate of new shows being added to the platform over the quarter, but remained confident that this would not affect its long-term growth.

"We had a strong but not stellar quarter, " the company wrote in a letter to shareholders. While most of the company's revenue growth comes from global markets, the vast majority of its costs remain dollar-denominated. Analysts surveyed by Zacks had expected revenue of $4.14 billion.

The Silicon Valley based company said it is beginning to "lead artistically" in some categories with its original content, earning enough Emmy nominations this year to break a 17-year top-spot streak by HBO.

At the same time, Netflix faces growing competition.

Apple, the world's most valuable company, is spending about $1bn on original programming for a video service of its own.

Going forward, "We anticipate more competition from the combined AT&T/WarnerMedia, from the combined Fox/Disney or Fox/Comcast as well as from worldwide players like Germany's ProSieben and Salto in France", the company said in the investor letter. "Our strategy is to simply keep improving, as we've been doing every year, " the company said.

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