By Yasin Ebrahim
Investing.com - Netflix (NASDAQ:NFLX) delivered softer third-quarter guidance Tuesday and second quarter earnings that missed analysts' estimates amid slowing subscriber growth.
Netflix announced earnings per share of $2.97 on revenue of $7.34 billion. Analysts polled by Investing.com anticipated EPS of $3.18 on revenue of $7.32 billion.
Netflix added 1.54 million users, above its forecast of 1 million net adds for the June quarter. Analysts had expected about 1.75 million net adds.
The slowing of subscriber growth in its core entertainment streaming business has prompted the company to diversify into video games.
"We view gaming as another new content category for us, similar to our expansion into original films, animation and unscripted TV," the company said.
Looking ahead, the streaming giant expects to add 3.5 million net subscriber adds, well short of analysts estimates of 5.5 million.
"COVID-related production delays in 2020 have led to a lighter first half of 2021 slate that will build through the course of the year. In the first six months of 2021, content amortization grew only 9% year over year (as compared to 17% in FY20). COVID and its variants make predicting the future hard, but with productions largely running smoothly so far, we’re optimistic in our ability to deliver a strong second half slate," the company said in a letter to investors.