Netflix's stock got pummeled Monday after it missed Wall Street's expectations for revenue and subscriber additions.
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.
In after-hours trading Monday, Netflix's shares were down $53.87 a share, or more than 13%, to $346.61.
"We had a strong but not stellar Q2," company officials said in a letter to shareholders.
Here's what the company reported and how its results compared with Wall Street's average expectations and its year-ago results:
- Revenue: $3.91 billion. Analysts were expecting $3.94 billion. In second quarter last year, Netflix posted $2.79 billion in sales.
- Earnings per share: 85 cents. Analysts were looking for 79.4 cents a share. In the second quarter of 2017, it earned 15 cents a share.
- Subscriber additions: 5.1 million total — 670,000 in the US and 4.47 million internationally. Analysts were expecting 6.3 million — 1.2 million in the US and 5.1 million internationally, according to Bloomberg. In the second quarter last year, it added 5.2 million — 1.1 million US subscribers and 4.1 million international ones.
Subscriber additions forecast:
In the third quarter, Netflix expects to add 5 million subscribers — 650,000 in the US and 4.35 million internationally. According to Bloomberg, analysts were projecting the company would add 5.93 million in the period — 875,000 domestically and 5.05 million internationally.
The company's stock closed regular trading up $4.68 a share, or 1%, to $400.48 and was up nearly 150% over the last year.
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. Instead, they noted that sometimes the company had exceeded its forecast and other times it hadn't.
"The quarterly guidance we provide is our actual internal forecast at the time we report and we strive for accuracy, meaning in some quarters we will be high and other quarters low relative to our guidance," they said.
In a recent report, Wedbush analyst Michael Pachter noted that Netflix's release schedule in the second quarter was light on original shows and warned that as a result the number of US subscribers it added in the period might fall shy of expectations.