Netflix adds fewer-than-expected subscribers in the second quarter, shares tumble

(Reuters) – Netflix Inc (NFLX.(O) added fewer subscribers than expected in the second quarter as the streaming video pioneer as increased prices in a number of key markets, including the United States, sending its shares down almost 10 percent in extended trading.

FILE PHOTO: The Netflix logo is seen at an office in Hollywood, Los Angeles, Los Angeles, California, USA July 16, 2018. REUTERS/Lucy Nicholson/File Photo

“We missed a weather forecast in all regions, but slightly more in regions where price increases,” the company said in a statement.

“We do not believe that competition was a factor, as there would not be a material change in the competitive landscape during Q2, and the competitive intensity, and our penetration rate has been varied between the regions,” the company said.

Globally, the company added 2.7 million subscribers, compared with analysts ‘ estimate of 5.05 million, according to IBES data, Refinitiv.

“While some of our AMERICAN membership is essentially flat in Q2, we expect a return to a more typical growth rate in Q3, and in the first few weeks of Q3,” Netflix said in a letter to shareholders.

The company said that it is expecting to add about 7 million subscribers worldwide in the current quarter, compared to estimates of 6.5 million, according to IBES data, Refinitiv.

Netflix’s stock is up 35% so far this year, trailing only Facebook Inc’s (FB.(O) in the FAANG group.

Net income decreased to a $270.7 million, or 60 cents per diluted share, for the second quarter ended June 30, from $384.3 million, or 85 cents a share, a year earlier.

Total revenue rose to $4.92 billion from $3.91 billion. Analysts on average had expected revenue of $ 4.93 billion.

The company’s shares were down about 10%, at $325 in the enlarged business.

Reporting Vibhuti Sharma in Bengaluru; Editing by Anil D’silva

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