Netflix shares dive as company fails to meet subscriber growth forecast

PanARMENIAN.Net - Netflix on Monday, April 18, reported 2.23 million new U.S. subscribers, much better than the 1.85 million that analysts had projected. But next quarter it expects to add just 500,000 new customers in the U.S, The Verge says.

This is the first full quarter after Netflix announced its massive global expansion to 130 new countries. It added a record 6.74 million new subscribers, and a whopping 42 percent of its customer base is now outside the United States.

Normally that kind of good news would send the share price up, but it took a nose dive instead. Investors were very unhappy with the company's guidance for next quarter, with Netflix predicting it will add just 2 million new customers overseas, compared to the 3.45 million analysts had been expecting. That number sent the stock down around 12 percent in after-hours trading.

The company had already been on a tear overseas, adding a record 5.59 million new subscribers last quarter, with four-fifths of those gains coming outside the U.S. Netflix has warned several times that it believes the market in the U.S. is becoming saturated, which is why it has moved so aggressively to open in new territories. On Monday, April 18, it reported 2.23 million new U.S. subscribers, much better than the 1.85 million that analysts had projected. But next quarter it expects to add just 500,000 new customers in the U.S.

On the financial side, Netflix reported $1.96 billion in revenue compared with $1.57 billion for this quarter last year. This quarter it recorded $49 million in operating income, down from $92 million for the same period last year, a change it attributed to the cost of its international expansion.