The Independent Voice of Southern Methodist University Since 1915

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The Daily Campus

The Independent Voice of Southern Methodist University Since 1915

The Daily Campus

The Independent Voice of Southern Methodist University Since 1915

The Daily Campus

SMU professor Susanne Scholz in the West Bank in 2018.
SMU professor to return to campus after being trapped in Gaza for 12 years
Sara Hummadi, Video Editor • May 18, 2024
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Netflix continues to struggle with increased competition

Netflix sales have declined in the last three years because of increased competition from HuluPlus, Amazon and other firms.
AP
Netflix sales have declined in the last three years because of increased competition from HuluPlus, Amazon and other firms.

Netflix sales have declined in the last three years because of increased competition from HuluPlus, Amazon and other firms. (AP)

Netflix reported $905 million for its third quarter – leaving only a net income of $8 million. The company’s plan to add seven million this year is in doubt. New subscribers numbered 1.16 million, causing stock values to plummet.

The value closed more than 16 percent lower than it opened after the data was released on Tuesday.

Earnings are a mere 13 cents a share (which is surprising high with than estimates of four cents per share), causing investors to doubt.

Netflix has publically addressed the seven million new subscriptions misstatement – noting it wouldn’t make it in the second quarter. However, the company gave little guidance for the fourth quarter.

DVD subscriptions fell 630,000 in the quarter – however the company boasts 25.1 million streaming subtractions.

The company has warned it may lose as much as 23 cents per share in the fourth quarter (experts predict a loss of 8 cents per share). Confidence in the company is shaky as the competition from HuluPlus, Amazon and Prime Instant Video continues to grow and Verizon’s and Coinstar’s Redbox Instant set to launch in the fourth quarter. The company is partially losing money due to expansions to new lands (such as Scandanavia, the United Kingdom, and Ireland), but stock-holders are well put to question the performance of Netflix.

Netflix hopes that original programming will help. There will be four series coming out exclusively on Netflix next year.

“We have enough cash on hand to fund our planned originals in addition to our ongoing expenses, maintain an adequate reserve, and then return to positive free cash flow,” chief executive officer Reed Hastings said in the statement to Business Week.

The future of the company looks grim from many viewpoints, but there is a strong possibility the company will start a better performance in 2013 after the international market begins to pay off. A low fourth quarter is guaranteed to happen so investors need to take a position to either stick with Netflix for the long haul or sell quick. 

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