Netflix Shares Tank 12% On Weak Subscriber Additions

(RTTNews) - Shares of Netflix Inc. (NFLX) tanked 12% in extended trading session Wednesday after the online-video streaming giant reported a weak global subscriber additions, with U.S. subscribers dropping for the first-time ever.

Netflix added 2.70 million subscribers globally in the quarter, far below its forecast of 5.00 million, to end the quarter with 151.56 million subscribers. The company lost 130 thousand customers in the U.S. during the quarter, while it expected an addition of 300 thousand subscribers. International subscriber additions were 2.83 million, below its expectation of 4.70 million.

Netflix said its content slate and increased prices in some regions hurt its subscriber growth. Netflix said it missed its forecast "slightly more so in regions with price increases."

"We think Q2's content slate drove less growth in paid net adds than we anticipated. Additionally, Q1 was so large for us (9.6m net adds), there may have been more pull-forward effect than we realized," the company said in a statement.

Looking forward to the third quarter, Netflix expects to add 7.00 million memberships, with 0.80 million in the U.S. and 6.20 million internationally.

Los Gatos, California-based Netflix's second-quarter profit dropped to $271 million or $0.60 per share from $384 million or $0.85 per share last year. On average, 36 analysts polled by Thomson Reuters expected earnings of $0.56 per share for the quarter.

Netflix's revenues for the quarter rose 26% to $4.92 billion from $3.91 billion last year. Analysts had a consensus revenue estimate of $4.93 billion for the quarter.

The video-streaming service provider said average paid streaming memberships rose 24%, ARPU increased 3% year over year.

Looking forward to the third quarter, Netflix expects revenues of $5.25 billion and earnings of $1.04 per share. Analysts polled by Thomson Reuters currently expect earnings of $1.04 per share and revenues of $5.25 billion.

NFLX closed Wednesday's trading at $362.44, down $3.55 or 0.97%, on the Nasdaq. The stock further slipped $44.94 or 12.40% in the after-hours trade.