NetFlix Shares Down 24% On Earnings
October 24, 2011 by Douglas A. McIntyre
Wall St. slashed shares of NetFlix (NASDAQ: NFLX) has it missed all projections for revenue, earnings, and subscribers. The firm’s price decisions, which have alienated customers, may have permanently hurt the company. The poor judgement which included raising subscriber rates sharply, comes as powerful competition from Amazon.com (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Hulu, and YouTube enter the market.
Third quarter earnings were up 63% to $1.16, which would have been an impressive improvement for any other company.
Netflix reported 21.45 million streaming subscriptions at the end of the third quarter and 13.9 million DVD subscribers. The company said total U.S. subscriber base by the end of its third quarter was 23.79 million—below expectations of roughly 24 million. Netflix lost 810,000 subscribers between the second and third quarters.
Netflix said it would miss Q4 forecasts as well.
Douglas A. McIntyre
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