Despite Selloff, Netflix Delivered Another Hit in the Second Quarter
Netflix (NASDAQ: NFLX) shares were down about 8% in pre-market trading Friday morning, but investors shouldn't be fooled by the sell-off. This was another rock-solid quarter for the streaming giant .
Boosted by tailwinds from the COVID-19 pandemic, Netflix posted strong results across all of its key metrics. It added 10.1 million subscribers in the quarter, well ahead of its guidance of 7.5 million. Revenue jumped 24.9% to $6.15 billion, beating its forecast at $6.05 billion and the analyst consensus of $6.08 billion.
Meanwhile, further down the income statement, the results were even more impressive. Its operating margin surged from 14.3% to 22.1%, and operating income nearly doubled from $706 million in the quarter a year ago to $1.36 billion, well past its own forecast of $1.08 billion. In addition to the strong subscriber growth, a decline in marketing spending in part due to the pandemic helped lift operating profits. Free cash flow came in at $899 million, compared to a loss of $594 million in the quarter a year ago, as the closely watched figure benefited from a cutback in production, again because of the pandemic. The only blemish in the report was that earnings per share came in below expectations, but that was due to $339 million in special expenses related to currency exchange and a change in a deferred tax allowance.
Source Fool.com
