Netflix stock tumbled more than 13% in early after-market trading as investors apparently were less impressed by the stronger-than-forecast Q2 earnings than they were by the company’s projection of a “consolidated loss” in Q4. The numbers for the three months ending in June were better than analysts expected — although far worse than a year ago, just before the company riled consumers by splitting the streaming and DVD rental services. Netflix had net earnings of $6.2M, down about 91% from the same period last year, on revenues of $889.2M, +12.8%. The revenue figure compares to forecasts for $888.9M. And earnings, at 11 cents a share, handily topped predictions of 5 cents. Paid streaming subscriptions in the U.S. increased 3% over the last three months to 22.9M, but the number of paid DVD rental customers fell 8.2% to 9.1M. The company says that in the current quarter “the Olympics are likely to have a negative impact on Netflix and sign-ups.” It hopes to add 1.8M domestic streaming customers in Q3, but if it falls short then “it would be challenging” to achieve its goal of adding 7M in 2012. Even so, Netflix says that in Q4 it will launch in another overseas market “which will drive us temporarily back into the red.” CEO Reed Hastings and CFO David Wells said in a note that shareholders “are depending on us to succeed in our global expansion, market by market, and eventually return to substantial global profits.”
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This article was printed from http://www.deadline.com/2012/07/netflix-shares-fall-after-it-forecasts-losses-from-overseas-expansion/
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