Netflix Shares Crash After New Subscriptions Fall Short of Expectations

"We had a strong but not stellar Q2 (second quarter)", Netflix said in a letter to shareholders. Instead, they noted that sometimes the company had exceeded its forecast and other times it hadn't.

This was expected to be a "subdued" quarter, as I wrote on Friday.

Revenue in the three months ended in June rose to $3.9 billion, yielding earnings per share of 88 cents.

The Los Gatos, Calif., company added 670,000 subscribers in the U.S. and 4.47 million subscribers internationally - well short of the 6.2 million Wall Street expected.

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Netflix's stock got hammered after the bell after reporting that it added far fewer subscribers in the second quarter than Wall Street was expecting - and warned of another subscriber shortfall to come in the third quarter. That erased roughly $25 billion from the company's market valuation.

Analysts had been modeling $3.94 billion in revenue and EPS of 79 cents. Domestic streaming net additions are projected at 650,000, below the average estimate for 953,000. The company expected to hit 5.11 million subscribers globally and 1.23 million subscribers domestically, but it actually hit 4.5 million and 700,000, respectively.

The company's stock closed regular trading up $4.68 a share, or 1%, to $400.48 and was up almost 150% over the previous year.

Update: The stock is now down $56.59, or 14%, at $343.90.

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