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What’s happening: Shares of Netflix fell on Wednesday, after the company reported mixed results for its first quarter.
What happened: The Los Gatos, California-based company reported revenue growth for the quarter but suffered a decline in sales in one of its major regions.
Netflix also made an important announcement, ending one of its services after 25 years.
How were the results: The streaming giant reported upbeat earnings for the quarter, although sales missed estimates.
Why it matters: Netflix added around 9 million subscribers in 2022, less than the whopping 18 million reported in the previous year.
Netflix said its planned crackdown on password sharing had yielded good results so far. To accelerate subscriber adds, the company announced a wider launch of the crackdown in the second quarter.
Netflix ended the first quarter with 232.5 million global paid subscribers, representing 4.9% year-over-year growth. Netflix added 1.75 million net new paid subscribers during the quarter, versus expectations of 2.2 million.
The company’s UCAN (US, Canada) region recorded 8% year-over-year growth in revenues, while sales from the EMEA (Europe, Middle East, Africa) region contracted by 2% year-over-year. The company’s revenues in LATAM (Latin America) region grew 7% year-over-year, while the APAC (Asia Pacific) region generated 2% growth.
Netflix’s popular shows during the first quarter included the new launches of “The Night Agent,” “The Glory” and “That ’90s Show.”
Netflix announced plans to discontinue its DVD-by-mail service, after 25 years of operation. The service will continue till September 29, 2023.
For the second quarter, management guided to revenues of $8.24 billion, representing 3.4% year-over-year growth, and earnings of $2.84 per share.
How shares responded: Netflix’s shares fell 3.2% to close at $323.12 on Wednesday, following the release of quarterly results. The company’s stock has added around 20% over the past six months.
What to watch: Investors will continue monitoring Netflix’s plans to boost subscriber adds and on new shows being released going ahead.
Context: The EUR/USD forex pair edged lower on Wednesday, failing to build on Tuesday’s gains.
Details: The EUR/USD forex pair moved lower on Wednesday, after recording gains in the previous session, with traders assessing the latest economic reports.
Eurozone’s annual inflation rate eased to 6.9% in March, moving lower for a fifth straight month. Inflation in the bloc still remains above the ECB’s (European Central Bank) target of 2.0% and the central bank is widely expected to hike its benchmark interest rate to being prices down further.
The ECB’s chief economist Philip Lane said he supports a rate hike during the meeting next month, adding that the size of the hike will depend on upcoming economic data.
Although Eurozone’s construction output increased 2.3% year-over-year in February, versus 0.5% growth a month ago, this was unable to lift sentiment for the euro.
The US dollar strengthened on Wednesday after closing in the negative zone on Tuesday, driven by rising Treasury yields. The US dollar index, which measures the greenback’s performance versus a basket of major peers, added 0.2% to 101.97 on Wednesday.
The EUR/USD forex pair fell 0.2% to 1.0956 on Wednesday, after hitting a 12-month high of 1.1075 on April 14.
The EUR/GBP forex pair also fell on Wednesday after data showed UK’s consumer price inflation slowing less-than-expected to 10.1% year-over-year in March, from February’s reading of 10.4%.
European equity markets closed little changed on Wednesday, with the benchmark STOXX Europe 600 Index declining by 0.1% to 468.13.
What are expectations: Traders await data on Eurozone’s balance of trade, consumer confidence indicator and ECB monetary policy meeting accounts today. The Eurozone, which reported a trade deficit of €30.6 billion in January, is expected to record a narrower gap of €11.9 billion in February. Analysts expect the Eurozone’s consumer confidence indicator to improve slightly to -19 in April, from -19.2 in March.
Other Markets: US trading indices closed lower on Wednesday, with Dow Jones index, S&P 500 and the Nasdaq 100 down by 0.23%, 0.01% and 0.02%, respectively.
The US disclosed a new military aid package for Ukraine in a bid to help the country’s military forces in its ongoing war against Russia. The safe-haven US dollar index fell slightly this morning.
Japan’s trade deficit widened to ¥754.7 billion in March, from ¥464.9 billion in the year-ago month, which exerted pressure on the JPY/USD forex pair.
The People’s Bank of China held its key lending rates unchanged for the eighth consecutive month at its recent fixing, sending the CNY/USD pair lower in forex trading this morning.
New Zealand’s annual inflation rate came in at 6.7% in the first quarter, versus 7.2% in the previous quarter, exerting pressure on the NZD/USD forex pair.
Canada’s industrial producer prices rose 0.1% in March, well below market estimates of 1.6% growth. The news sent the CAD/USD pair lower in forex trading this morning.
Germany’s producer price inflation, France’s manufacturing climate indicator and business climate indicator, Spain’s balance of trade, Turkey’s gross foreign exchange reserves and government debt, South Africa’s value of recorded building plans passed, Mexico’s retail sales, US Philadelphia Fed manufacturing index, initial jobless claims, continuing jobless claims, existing home sales and natural gas stocks change, Argentina’s leading economic index and balance of trade, as well as China’s foreign direct investment.
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