Netflix (NASDAQ:NFLX) reported a massive surge in users as people stayed home due to the coronavirus, but the company’s stock dropped almost 9% after hours on guidance for new subscribers that was less than half what analysts expected.
Simultaneously, the Los Gatos, Calif.-based company announced that Ted Sarandos was being promoted to co-CEO, elevating him from chief content officer.
Netflix’s results for the second quarter reflect for the first time how business looked during three full months of a pandemic. Netflix missed analyst expectations on earnings per share largely due to a one-time charge in California related to research and development tax credits. But the company beat expectations for revenue and global paid net subscribers.
Along with becoming co-CEO, Sarandos will retain his current role and join the board. Chief Product Officer Greg Peters will take on the added position of chief operating officer, Netflix said.
Netflix provided third-quarter revenue guidance of $6.33 billion, below analyst estimates of $6.40 billion. It expects third quarter earnings of $2.09 per share, above analyst estimates of $2.01.
Netflix expects 2.5 million net subscriber additions for the third quarter, while analysts were expecting 5.27 million.
Netflix said it does not expect its 2020 slate of content to be significantly impacted by production shutdowns created by the pandemic. It expects that current production setbacks will push more of its big titles to the end of 2021, but that the "total number of originals for the full year will still be higher than 2020."
Netflix plans to supplement its original content with other films and shows it’s acquired.
NFLX shares fell in the first hour of Friday trading by $34.52, or 6.5%, to $492.88,
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