By Bill Peters

Streaming service cites 'intense competition' and acknowledges 'some investor concern about our view-hours growth'

Netflix's stock was falling after earnings.

Wall Street's worries over Netflix's viewership trends got worse on Tuesday, as the streaming giant's financial forecasts came in below analysts' expectations.

Shares of Netflix (NFLX) were down 4.4% after hours.

The company reported the results roughly a week after cutting 1,000 jobs, or around 6% of its staff, amid worries about waning viewership, competition with short-form video providers and pushback to recent price increases. Management on Tuesday said the job cuts would weigh on margins, a measure of profitability.

"With intense competition and an explosion of content competing for consumer attention, strategic clarity and excellent execution are critical," Netflix said in its letter to shareholders on Tuesday.

Management, in that letter, acknowledged "some investor concern about our view-hours growth." But it said members' responses to higher subscription prices this year are "consistent with prior price changes and our expectations," indicating healthy engagement.

Still, the company said it would try to increase hours watched by expanding access through licensing and steps to bring more third-party programming to its platform, such as its partnership with TF1 in France.

Netflix said it expects fourth-quarter revenue of $13.44 billion, with earnings per share of 67 cents. That outlook was below FactSet estimates for $13.52 billion in sales and earnings per share of 73 cents.

For the full year, the company expects $51.1 billion in revenue, a bit below analysts' expectations for $51.21 billion. That was slightly below the midpoint of an earlier company forecast, as it trims its expectations for ad revenue due to a "slightly slower-than-expected rollout of some ad-product capabilities."

Netflix's stock is down 26.7% so far this year. Analysts have worried about consumer pushback from subscription-price increases. Some have also argued that Netflix has been too focused on games, podcasts and live events - areas Wall Street once banked on for future growth - and not enough on shows and movies that people actually want to watch. Netflix has also said it would publish some viewership data less frequently.

However, other analysts have said the company is still big enough globally to weather dry spells in the U.S.

Netflix reported third-quarter revenue of $12.874 billion, compared with FactSet forecasts for $12.869 billion, with sales growth coming from price increases. The company earned 87 cents a share, compared with estimates for 82 cents a share.

-Bill Peters

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10-20-26 1654ET