Netflix plunges as subscriber growth disappoints

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The company's stock was down more than 13 percent in early after-hours trading in response to the news. The stock is now down by over 13%, after it significantly missed subscriber targets.

Earnings per share came in at 85 cents, beating the 79 cents predicted by analysts surveyed by Thomson Reuters I/B/E/S.

With all this, the stock is tanking.

The California-based company added 670,000 net subscribers in the USA, far below the 1.19 million net additions expected by analysts polled by Thomson Reuters.

Netflix reported 674,000 domestic subscriber additions, lower than the 1.23 million expected. Two of its originals - "Set It Up", starring Lucy Liu and Taye Diggs, and "The Kissing Booth" - have been "watched and loved by tens of millions of Netflix members", said the company, which is usually reticent to share viewership data.

Foxtel executives are this morning witnessing light at the end of a tunnel with news that consumer engagement with arch rival Netflix is slowing.

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The company's shares fell more than 13 percent shortly after the start of trading on Tuesday before rebounding, with the stock trading down almost 6 percent as of 2:40 p.m.

In a letter to shareholders, Netflix (NFLX) said it had a "a strong but not stellar" second quarter.

Netflix has 130 million subscribers globally. "Should Hulu begin to compete effectively for Warner, Fox, Universal, and Disney content, we expect exclusive deals to sharply reduce the amount of content purchased by Netflix, limiting Netflix's ability to raise price [s]".

"Netflix has faced hurdles before and this Q2 report won't be the last", PiperJaffray analyst Michael Olson wrote. Revenue was up 6 percent to $3.9 billion. It posted US$3.91 billion, compared with an average estimate of US$3.94 billion.

"I think it's more of a one-quarter issue that shouldn't bleed into the next few quarters, despite the company's conservative guidance for September", Ives was quoted as saying by Marketwatch.

Netflix will spend as much as $8 billion producing and acquiring TV shows and movies this year, including Disenchantment from The Simpsons and Futurama creator Matt Groening, new seasons of House of Cards and Making a Murderer, and presumably several series and films yet to be announced. Apple Inc., meanwhile, is spending more than $1 billion on original programming. "Our strategy is to simply keep improving, as we've been doing every year in the past".

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