Record subscription growth and earnings weren’t enough to keep Wall Street happy with Netflix’s second quarter results on Wednesday.
Shares of Netflix tumbled on the news that the company’s revenues were softer than had been anticipated.
The subscription rental service’s stock dipped by 8.6 percent to $109.04 in after-hours trading. It had closed at $119.68 a share on the Nasdaq.
Sales rose 27 percent to $519.8 million, up from $408.5 million in the same quarter last year, but analysts had been predicting that the company would post revenue of $524.4 million for the period.
The company said Wednesday that part of the reason for the lower-than-anticipated results was that its average monthly subscription bills had dipped by $1 to $12.29. Still, there was good news for the company’s bottom line, as more and more of its customers, or some 61 percent, streamed all or part of a movie, up from 37 percent in the second quarter of 2009.
Despite Wall Street’s fickle affections, the news was primarily rosy for Netflix. The movie rental giant’s profits jumped 37 percent to $43.5 million, or 80 cents per share. Over the same period last year, Netflix banked $32.4 million, or 54 cents per share.
Helped no doubt by Blockbuster’s fiscal free-fall and continued store closures, Netflix continued to aggressively build its subscriber base. The company added more a million customers to its rolls, giving it over 15 million subscribers. Last quarter, the number of Netflix stood at 13.9 million. The company said it anticipates that it will have between 17.7 million and 18.5 million subscribers by the end of the year.
Though Netflix outperformed expectations in nearly every element of its balance sheet, the company has so consistently bested projections that the more modest sales picture came as a disappointment. Going into Wednesday’s announcement, Netflix had beaten Wall Street’s expectations for 11 of its past 12 quarterly earnings reports.
Netflix revised its projections for the year, saying it now expects to earn $2.58 to $2.86 a share, up from the $2.41 to $2.63 a share it had been predicting. Netflix said it now anticipates sales of between $2.14 billion to $2.16 billion, as opposed to the $2.11 billion to $2.16 billion is had previously projected.