Wall Street darling Netflix's share price plummeted by 14 per cent in after-hours trading, thanks to a set of lacklustre results for its second quarter. The streaming-video company reported Monday that it added 5.2 million new members between April and June, a million fewer customers than it had previously forecast.
The numbers came in just shy of those projections, with the company revealing on Monday that they added 5.15 million new customers - 4.47 million of which came from non-U.S. markets.
Earnings per share came in at 85 cents, beating the 79 cents predicted by analysts surveyed by Thomson Reuters I/B/E/S.
Netflix executives expressed little concern on a call with analysts and investors, insisting their growth over the past 12 months has still exceeded expectations.
Wall Street analysts expected 1.23 million net adds in the US and 5.11 million overseas for the period (slightly higher that Netflix's prior guidance).
It signed up 4.47 million subscribers internationally, while analysts were expecting 4.97 million. Netflix fell short of its forecasts a couple years ago, a shortfall the company blamed at the time on the transition to chip-based credit cards.
Bringing in more subscribers and money is vital for Netflix because it expects to keep spending more on exclusive TV shows and movies to try to stand out from rivals.
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"We had a strong but not stellar Q2 (second quarter)", Netflix said in a letter to shareholders.
"This isn't entirely surprising given rising competition in the video streaming market, where Amazon, Hulu, HBO and others are gaining share of subscription video dollars at Netflix's expense", he added.
On top of growth, the company has begun to focus on its profitability. Analysts had projected revenue of $3.94 billion. Revenue climbed 6 percent to $3.9 billion.
Netflix cited an array of competitors, starting with YouTube.
Going forward, "We anticipate more competition from the combined AT&T/WarnerMedia, from the combined Fox/Disney or Fox/Comcast as well as from global players like Germany's ProSieben and Salto in France", the company said in the investor letter.
Meanwhile, Apple - the world's most valuable company - is spending about $1 billion on original programming for a video service of its own.