Netflix now has 23.41 million domestic streaming subscribers
Netflix beat analyst expectations with its first quarter earnings, released Monday, despite posting a quarterly loss of $0.08 earnings per share. Analysts had expected a loss of $0.27 per share.
Global revenue rose to 870 million, a 21 percent increase over a year ago and slightly better than analysts' prediction of $855 million.
The company is now projecting it could return to profitability by next quarter after it had said it might take all year.
Despite the better-than-expected earnings figures, shares are already down double digits in after hours trading.
The number on everyone’s radar headed into the earnings release was the number of domestic streaming subscribers, where Netflix announced 23.41 million. It had projected anywhere from 22.8 to 23.6 million.
Netflix needs increased domestic revenue to offset its continued expansion overseas and investment in original programming from the likes of David Fincher.
In a note to shareholders, CEO Reed Hastings and CFO David Wells projected that the growth of subscribers in the next quarter would be below where it was in 2010. However they also said that growth in domestic streaming profits would offset the decline in DVD profits.
That DVD-streaming divide has plagued the company over the past several months as it raised its prices, then tried to spin off its DVD service and then had to bring it back under the Netflix banner. All of it stirred up consumer backlash and created a PR disaster.
Netflix has been in the process of righting the ship, especially as it faces increased competition. In the same note, Hastings acknowledged competition across many platforms, from traditional TV to Hulu and Amazon Prime.
Analysts are split over how much those latter competing services will limit the growth of Netflix's subscriber base. Like Netflix, which debuted its first original show, "Lilyhammer" in Februrary, Hulu is investing in its own programming as well.
As for the international part of the business, Netflix surpassed 3 million total international streaming members, but non-U.S. members still account for less than 12 percent of streaming members (and less than 10 percent of paid members).
Netflix recently launched in the UK and Ireland after initial forays into Canada and Latin America. Of them all, Latin America poses the greatest challenge.
"The odds of us building a larger, profitable business in Latin America are very good, but it will take longer than we initially thought," Hastings and Wells wrote.
More to come…