Netflix Quarterly Profit Misses the Mark Despite Strong Subscriber Growth

Netflix added a whopping 1.69 million net subscribers to its service in the quarter.

Tamara Walsh
Tamara Walsh
Jul 21, 2014 at 5:05PM
Consumer Goods

Netflix (NASDAQ:NFLX) reported fiscal 2014 second-quarter earnings this afternoon that fell short of Wall Street expectations for the period. However, investors didn't seem to care as subscriber growth surged and revenue was in line with estimates.Shares were up slightly in after-hours trading.

For the three-month period, Netflix posted a profit of $1.15, which was up from $0.49 a year ago. Nevertheless, that was a penny short of analysts' estimates for earnings per share of $1.16 in the quarter. Revenue, on the other hand, was in line with expectations at $1.34 billion.

Source: The Motley Fool.

Netflix added a whopping 1.69 million net subscribers to its service in the quarter (most outside the U.S.). The company now boasts over 50 million members across 40 countries. The streaming star ended the second quarter with 13.8 million international members, up from 7.75 million a year ago. Moreover, Netflix said it plans to begin offering its streaming services in Germany, France, Austria, Switzerland, Belgium, and Luxembourg in the third quarter. This should significantly increase the company's addressable market overseas in the quarters ahead. The company expects to add another 3.7 million worldwide subscribers in the current quarter ending in September, including 1.3 million U.S. customers.

Additionally, Netflix said its price hike in May did not affect membership growth in the quarter. Netflix original content continues to be a hit with viewers. In fact, Netflix original series were recently nominated for 31 Emmy awards, with House of Cards grabbing 13 nods. Shares of Netflix were up nearly 2% in after hours trading, as of 4:45 p.m.

-- Material from The Associated Press was used in this report.