With an unusual loss in U.S. subscribers, Netflix posted slightly less-than-expected top-line results, but came out ahead of Wall Street’s estimates for earnings. The online entertainment streaming company reported revenues of $4.92 billion and earnings per share of 60 cents compared to expectations of $4.93 million and 56 cents per share, CNBC reported.
The company had 130,000 fewer subscribers in the U.S. at the second quarter’s close in comparison with the conclusion of the first quarter. Shares in the California-based company fell over 11 percent on Wednesday (July 17) in after-hours trading. Even so, the company’s shares have increased by double digits this year.
Netflix brought on 2.7 million paid subscribers in the quarter globally, which was much less than the five million it had predicted. The figure was also under the 5.5 million it brought on in the second quarter of last year. The company last experienced U.S. quarter-to-quarter subscriber declines in 2011 following the rollout of a new pricing model that subscribers rejected and was ultimately discontinued.
The company wrote in a letter to shareholders that “we think Q2’s content slate drove less growth in paid net adds than we anticipated.” The company did, however, make note of multiple new shows, such as the limited series “When They See Us” and the dark comedy “Dead to Me.”
The news comes as Netflix was expected to again beat earnings estimates this quarter, even with the upcoming loss of popular TV shows “Friends” and “The Office” and the rise of streaming competitors. The report was expected to include an increase in revenue and in subscriber growth totals.
Even with the decline in new U.S. subscribers, analysts pointed out that Netflix is appropriately targeting international markets with success, and will continue to focus on enlarging its global consumer base. Netflix reported higher revenue than expected in the first quarter, and assured investors that the company is not worried about new streaming players like Disney+ and Apple TV.