Netflix (Nasdaq: NFLX) stock had a very short-lived boost from Monday's earnings report.
The earnings report showed great news for the company - Netflix reported it ended Q3 with 29.3 million paid domestic users. The video streaming giant added 1.3 million U.S. customers in the third quarter and is on track to surpass Time Warner's HBO in paying viewers.Here's what all this will mean for Netflix stock in 2014...
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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