Has the bubble finally burst on Netflix? After five straight quarters of meeting or exceeding analyst expectations for subscriber growth, Netflix fell short, disappointing Wall Street.
The streaming giant said Monday that it had added just 670,000 subscribers in the United States, compared with the 1.2 million many analysts predicted in the second quarter, and 4.5 million overseas subscribers instead of the 5.1 million projected. The company’s stock was down more than 13 percent in early after-hours trading in response to the news.
While the misses seem minuscule for a company with more than 125 million global subscribers, they could validate investors’ fears of a company in slowdown for the first time in years. Wall Street has been watching closely as Disney ramps up its subscription-content efforts and HBO, under new owner AT&T, is adopting a new strategy to compete.
Meanwhile, rivals such as Apple are upping content efforts.
The news of just 5.15 million total subscriber adds was especially pointed for Wall Street given Netflix’s addition of 7.4 million in the first quarter.
The company roughly met analyst expectations on earnings, at $3.91 billion compared with estimates of $3.94 billion.
— Steven Zeitchik
U.S. retail sales rose at a solid pace last month despite higher prices and modest wage gains, a sign of consumer optimism.
The Commerce Department said Monday that sales at retailers and restaurants increased 0.5 percent in June, following a big 1.3 percent gain the previous month. May’s figure was revised sharply higher from an initial estimate of 0.8 percent.
Americans are confident about spending, with the unemployment rate near an 18-year low and the economy accelerating after a sluggish start to the year. Retail sales rose 6.6 percent from a year earlier, the fastest annual pace in five years.
Still, some of the spending increases, such as gas station sales, simply reflect higher prices. Excluding auto dealers and gas stations, sales rose 0.3 percent in June.
Home and garden stores reported a 0.8 percent sales gain, probably lifted in part by more expensive lumber. The Trump administration imposed tariffs on some lumber imports from Canada last fall.
— Associated Press
The former head of a Houston-based oil producer was fined and banned from holding executive positions to settle a regulator’s claims that he financed a lavish lifestyle with unreported loans from company vendors and a hedge fund manager who was seeking a board seat.
John D. Schiller Jr., 59, failed to disclose more than $10 million in personal loans he received while serving as chief executive of Energy XXI, the Securities and Exchange Commission said in a statement Monday. Schiller sought the money in exchange for business contracts in 2014, when facing margin calls on a highly leveraged account secured by his company stock, the SEC said.
The SEC said that Schiller also caused the company to violate disclosure rules by failing to report compensation in the form of first-class travel, a shopping spree and an office bar stocked with high-end liquor and cigars. Schiller, who agreed to settle the case without admitting or denying wrongdoing, will pay a $180,000 fine and accept a five-year ban from acting as an officer or director of a public company, the SEC said.
— Bloomberg News
Warren Buffett has donated about $3.4 billion of Berkshire Hathaway stock to five charities, the billionaire's largest gift in his long-standing plan to give away his fortune. Buffett's 13th annual donation comprised about 17.7 million Class B shares of Berkshire, valued at $192 each as of Monday's market close. The largest block went to the Bill & Melinda Gates Foundation. Buffett's own foundation and charities run by his children received the rest. Buffett, 87, has since 2006 donated more than $30.9 billion to the charities.
The New York Department of Financial Services said Monday it had granted a virtual-currency license to bitcoin payments processor BitPay. Founded in 2011, BitPay is now authorized to offer clearing and settlement services to merchants willing to accept or issue payments in bitcoin. It is the first virtual-currency wholesale payments processor to be approved for a license, the department said.
— From news services
9:15 a.m.: Federal Reserve releases industrial production for June.
10 a.m.: National Association of Home Builders releases housing market index for July.
4 p.m.: Treasury releases international money flows data for May.