Netflix Shares Drop After Missing on This in Its Earnings Report

Shares of streaming giant Netflix plummeted over 14% on Monday after reporting its second quarter financial report when the market closed.

For the quarter, the company revealed that it had missed in its subscriber addition projections. This is the first time Netflix has missed on this metric in five quarters.

Analysts had been waiting for 1.23 million subscribers domestically but Netflix only added 674,000. The company added 4.47 million subscribers internationally while analysts had been expecting 5.11 million subscribers.

Revenue for the quarter was $3.91 billion while analysts expected $3.94 billion. Earnings per share was 85 cents, which included an $85 million in non-cash unrealized gain.

Looking ahead the company also projected dismal guidance for the third quarter. It expects 5 million subscribers to be added while estimates call for 6 million.

CEO Reed Hastings was optimistic on the earnings call and said that “paid net ads are up compared to year ago and forecast to be up on a year-over-year basis in Q3. The fundamentals have never been stronger. Our viewing is setting year-over-year records. The shows that we have coming. So, we’re feeling very strong about the business.”

Disclaimer: We have no position in Netflix, Inc. (NASDAQ: NFLX) and have not been compensated for this article.