Netflix shares dive after disappointing quarterly results

Netflix shares, which as one of the best-performing stocks have soared 109 percent this year, fell almost 14 percent to $344.60 in after-hours trading.

The streaming company said it had added 5.2 million subscribers in the three months to June 30, below analyst forecasts for 6.3 million subscribers and its own expectations.

GBH Insights analyst Daniel Ives called the second-quarter showing "a near-term gut punch" to Netflix.

The company reported quarterly revenue of $3.91 billion and earnings per share of 85 cents.

The results broke Netflix's two-year streak of over-delivering on subscriber growth.

Wall Street analysts expected 1.23 million net adds in the US and 5.11 million overseas for the period (slightly higher that Netflix's prior guidance).

Still, Netflix ended Q2 with 130.1 million global subs, up 25% year over year, with 56 million in the USA and 72.8 million elsewhere.

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's compared with analyst estimates that Netflix would have Q3 net adds of 947,000 in the USA and 5.05 million internationally. That exceeded the 79 cents a share estimated by analysts polled by Factset.

In their letter, Netflix officials acknowledged that the company's subscriber growth was lower than anticipated but didn't off much of an explanation of how it came up short.

On top of growth, the company has begun to focus on its profitability. That comes out to 4.87 million new subscribers for the quarter, far below the 6.2 million Netflix was hoping for.

Netflix already has been battling challenges from Amazon, Google's YouTube and Hulu in the video streaming market, and it is likely to face even stiffer competition as other formidable rivals try to muscle into the market.

Netflix shares have doubled in value this year, and just this week the company surpassed HBO with the highest number of Emmy nominations of anyone, with 112.

Inc plans to add more regional content in India as it builds the Prime video service around the world.

"Our strategy is to simply keep improving", Netflix said.

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