Netflix Q2: Meets revenue target, misses on subscribers

Netflix (s NFLX) met global revenue expectations for the second quarter, reporting $889 million in worldwide income, up 13 percent year over year. But the company narrowly missed analysts’ goals for subscriber additions, reporting only 530,000 new U.S. users of its streaming service.
Analysts are still bearish as to whether Netflix can meet its stated goal of adding 7 million subscribers to its U.S. streaming service by year’s end. They had hoped that the company would come in at the high side of — or even beat — its own U.S. streaming subscriber projection of 23.6 million – 24.2 million to end the second quarter. But it finished the period ending June 30 with just 23.94 million.
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Netflix also missed analyst expectations that it end the quarter with 3.7 million customers in Canada, Latin America and Europe — it finished with 3.62 million. Overall, it ended up with nearly 1.1 million new streaming customers globally, while analysts had hoped for more like 2 million.
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Investors are once again reacting to the Netflix earnings day with venom — shares are down more than 15 percent in after-hours trading.
Netflix reported a narrow $6 million profit for the quarter, or 11 cents per share, after enduring a $5 million loss in the first quarter.
Netflix sent out an afternoon memo to shareholders — a conference call with investors was set for 3 p.m. PT.
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For the third quarter, Netflix officials set subscriber addition forecasts in the range of 1 million – 1.8 million — a number, CEO Reed Hastings said during the afternoon call, that could be impacted by consumers tuning out of streaming and into the London Olympic Games for two weeks.
The company feels that if it can get the high end of that forecast, it can still reach 7 million additional streaming customers by the end of the year. Driving that growth, Hasting expects, will be brisk sales of smart TVs with embedded Netflix player apps in the fourth quarter.
While Hastings addressed the expansion of Amazon’s streaming video business into its competitive realm, he didn’t even mention the joint venture currently being ramped up by Verizon and Redbox. Details about that JV were finally released this a.m.