(Nasdaq: NFLX)
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Netflix Earnings Report (Nasdaq: NFLX): Rough Times Ahead
Today's (Tuesday's) Netflix Inc. (Nasdaq: NFLX) earnings report was better than expected, but turned off investors with weak guidance for the rest of 2012.
For the second quarter Netflix reported earnings per share of 11 cents. Profit hit $6 million, a huge improvement from last quarter's $4.5 million loss. Revenue was up almost 13% to $889 million, up from $789 million in the second quarter of 2011.
Netflix earnings beat analysts' forecasts of 4 cents per share on revenue of $889 million, but fell short of last quarter's $1.26 earnings per share.
Netflix reported it added 1.1. million subscribers in the second quarter, to total more than 27 million users worldwide. They had projected adding between 200,000 to 800,000 subscribers, lower than the 1.7 million subscribers added last quarter.
But the company said it might not meet its goal of totaling 7 million U.S. subscribers in 2012. Netflix projected an additional 1 million to 1.8 million U.S. streaming subscribers in the third quarter, and unless it hits the high end, it will likely fall short of 7 million by year's end.
For its third quarter, Netflix said it expects to lose as much as 10 cents a share, or earn as much as 14 cents a share. That range would give a midpoint of a profit of 2 cents a share.
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Netflix (Nasdaq: NFLX) Stock Falls Out of Favor as Members Slip Away
The tumultuous tale of Netflix Inc. (NASDAQ: NFLX) got another twist this week when the company reported disappointing earnings and guidance after the close Monday.
Netflix posted its first quarterly loss in seven years for the first three months of 2012.
The disheartening numbers and guarded sentiment prompted words of warning from analysts and caused investors to flee the DVD rental-by-mail and streaming video company. investors tuned out in Tuesday trading, sending shares down more than 13%.
While the earnings loss was substantially smaller than analysts' forecast, the focus remained on second-quarter estimates that warn of a slowdown in subscriber growth through early summer.
The time between April and June is historically a lethargic period for Netflix as longer days and warmer temperatures lure people outdoors and away from viewing movies and old TV shows at home.
But the picture for Netflix, once a media darling with Hollywood starlet-like status, looks fuzzy at best.
It is losing the one thing that made it a hot hit: its members.
Netflix (Nasdaq: NFLX) Falls Short
Netflix anticipated adding 190,000 to 790,000 subscribers to its video-streaming service in the current quarter. That was well below analyst estimates of more than 1 million.
"They are giving a signal to the Street their growth story is over," Wedbush Securities analyst Michael Pachter, who rates Netflix a "Sell," told Reuters.
The projection startled already-jittery investors who were watching for clues the company would revisit its once-impressive growth after suffering a chain of gaffes over the last year.
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