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Netflix Turns Things Around After Months-Long Struggle

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Netflix has gained more than 2.4 million paying subscribers over the past three months, the company announced in its 2022 third quarter earnings report. The uptick in customers is more than enough to make up for the back-t0-back drop in memberships the streaming service incurred earlier in the year. The number also exceeds expectations.

Back in July, the company forecast that it would add one million new subscribers this quarter, banking on the release of popular series like the second half of Stranger Things fourth season and the fifth season of Cobra Kai to draw in new customers. And apparently, the wager panned out. Netflix chalked this quarters’ growth up to “big hits across TV and film,” like Monster: The Jeffrey Dahmer Story and Purple Hearts. Most of the new subscribers are outside the United States.

In addition to the boosted new subscriber count, Netflix also reported revenue above expectations, at about $7.9 billion—a 5.9% increase from the same time last year. However the company’s profits are down about 3% from September 30, 2021. “After a challenging first half, we believe we’re on a path to reaccelerate growth,” the company wrote in its Tuesday letter to shareholders.

For months now, the streaming giant has faced financial difficulty. In the middle of April 2022, the company reported its first subscriber loss in a decade—at a time when analysts has predicted a gain of more than two million. Its stock plummeted in response. Then, the company enacted multiple big layoffs, cutting hundreds of employees, and began to issue warnings about a future password-sharing crackdown, as well as the possibility of ads on the platform.

The second quarter of 2022 also didn’t bode well for Netflix—as subscriber numbers continued to drop (though less than forecast). In the wake of the double user dump, the company started testing and hinting at different versions and features of the proposed password sharing and advertising changes.

Last week, Netflix confirmed that a cheaper, ad-supported subscription plan would be launching in November. The plan will cost $6.99 per month in the U.S., exclude some titles because of “licensing restrictions,” and prevent users from downloading shows, according the company’s announcement.

Just yesterday, the streaming service introduced a way to transfer viewer profiles between accounts to U.S. audiences, following pilots in Chile, Costa Rica, and Peru. Although the initial announcement avoided mentioning password sharing altogether, the move comes in obvious preparation for the looming, promised password crackdown, as confirmed by Tuesday’s shareholder letter. Without the ability to transfer profile information to new paying accounts, many peoples’ preferences and algorithms could’ve been otherwise left orphaned and inaccessible.

“Finally, we’ve landed on a thoughtful approach to monetize account sharing and we’ll begin rolling this out more broadly starting in early 2023,” wrote the company. “After listening to consumer feedback, we are going to offer the ability for borrowers to transfer their Netflix profile into their own account, and for sharers to manage their devices more easily and to create sub-accounts (“extra member”), if they want to pay for family or friends.”

Though once basically the only household name in streaming, Netflix has faced increasing competition in recent years. It seems like every media company has its own service, and people are choosing their loyalties in a crowded field of options. The company has been quick to blame its competitors (as well as the war in Ukraine, inflation, and password sharing) for its recent struggles. However, mismanagement at the core of the company’s model might have had something to with it too. Yet, whether or not there is rot deep down in Netflix’s business strategy, the company will clearly survive to fight another quarter.

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TC Energy cuts cost estimate for Southeast Gateway pipeline project in Mexico

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CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.

It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.

The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.

Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.

TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.

The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:TRP)

The Canadian Press. All rights reserved.

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BCE reports Q3 loss on asset impairment charge, cuts revenue guidance

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BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.

The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.

On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.

“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.

“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”

Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.

BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.

The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.

BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.

It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.

The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”

Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:BCE)

The Canadian Press. All rights reserved.

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Canada Goose reports Q2 revenue down from year ago, trims full-year guidance

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TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.

The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.

Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.

On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.

In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.

It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:GOOS)

The Canadian Press. All rights reserved.

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