WASHINGTON (dpa-AFX) - Netflix Inc., (NFLX) Monday reported an increase in profit for the second quarter, as revenues grew from last year. Earnings for the quarter trumped Wall Street estimates, while revenues came in line with expectations.
However, shares of the online movie rental service plunged 14 percent in extended trading hours, after it reported a significant slowdown in subscriber growth --both in the US and overseas.
Netflix added 1.68 million subscribers globally in the quarter, to end the quarter with 83.18 million subscribers. However, the company was only able to add 160 thousand customers in the almost saturated U.S. market, along with 1.52 million International subscriber additions.
In April, Netflix projected to add 2.5 million subscriber additions, including 500,000 in the U.S. and 2 million internationally. In previous quarter, Netflix added 6.74 million total subscriber additions, 2.23 million in the U.S. and 4.51 million overseas.
The video-streaming service provider now focuses on international expansion as it faces strong competition in the US.
'We are growing, but not as fast as we would like or have been. Disrupting a big market can be bumpy, but the opportunity ahead is as big as ever and we continue to improve every aspect of our business,' the company said in a press release.
Meanwhile, the company's international expansion is weighing on its bottom line. Marketing costs increased to $216.0 million from $197.1 million, while technology and development expenses rose to $207.3 million from $155.1 million last year.
Moving ahead, Neflix expects to add 2.30 million subscribers globally, with 300 thousand in the US and 2.0 million in international markets.
Los Gatos, California-based Netflix's second-quarter profit rose to $40.8 million or $0.09 per share from $26.3 million or $0.06 per share last year. On average, 33 analysts polled by Thomson Reuters expected earnings of $0.02 per share for the quarter. Analysts estimates typically exclude one-time items.
Netflix's revenues for the quarter rose to $2.11 billion from $1.64 billion last year. Analysts had a consensus revenue estimate of $2.11 billion for the quarter.
NFLX closed Monday's trading at $98.81, up $0.42 or 0.43 %, on the Nasdaq. The stock, however, plunged $14.66 or 14.84% in the after-hours trade.
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