Shares of Netflix Inc. fell nearly 12% posting its biggest fall in four years after the company gave a forecast for the second quarter that fell short of analysts' expectations. In addition, chairman and co-founder Reed Hastings said he was leaving after 29 years at the company. This comes just months after it lost out on a bid for Warner Bros. Discovery Inc.
In the second quarter of this year, Netflix sees earnings per share of 78 cents versus the Wall Street consensus of 85 cents. The revenue predictions for the second quarter were also tepid. Netflix said revenue would be $12.57 billion for the quarter ended June. This is lower than the Bloomberg estimate of $12.64 billion.
Before the results were announced, shares of Netflix had gained 27% since it abandoned the pursuit of Warner Bros. in late February.
"We expect Q2 to have the highest year-over-year content amortization growth rate in 2026, before decelerating to mid-to-high single digit growth in the second half of the year," the company said.
However, the streaming giant posted first-quarter profit that met analyst estimates as subscription revenue remained strong. In the first quarter Netflix reported earnings per share of $1.23, better than the analyst estimate of 79 cents. Its revenue for the quarter ended March rose 16.2% to $12.25 billion beating consensus estimate of $12.18 billion.
The company further added that it continues to project 2026 revenue of $50.7 billion- $51.7 billion and an operating margin of 31.5%.
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