Netflix 2Q Subscriber Additions Forecast Misses Estimates
Video-streaming service provider Netflix Inc forecast both U.S. and international subscriber additions for the current quarter below analysts' expectation, sending its shares tumbling about 9 percent in after-hours trading.
Netflix, which started in 1997 as a DVD-rental-by-mail firm, said it expected to add about 500,000 customers in the United States in the second quarter ending June.
Analysts on average had expected the company to add 586,000 subscribers in the United States, according to research firm FactSet StreetAccount.
Netflix said it expected to add about 2 million subscribers internationally. Analysts on average had expected the company to add 3.50 million subscribers, according to FactSet.
In January, the company went live in more than 130 countries, a huge global push by Chief Executive Reed Hastings to counter slowing growth in the United States.
Netflix said its forecast for fewer net adds internationally was because of tough comparisons with the year-ago period when it had launched in Australia and New Zealand.
The company will boost rates for more than half of its U.S. members from May.
"We are rolling this out slowly over the year, rather than mostly in May, so we can learn as we go," the company said in a statement.
The company said it added 2.23 million U.S. subscribers in the first quarter ended March 31, more than the 1.75 million it had expected would sign up.
Over the past year, Netflix stock had risen more than 60 percent, making it the No. 3 performer on the S&P 500.
(Reporting by Anya George Tharakan in Bengaluru; Editing by Savio D'Souza)