Netflix’s stock slipped 15% after the video streaming and DVD subscription service said in its third-quarter earnings statement that it did not expect to add 7 million domestic subscribers this year, as had been forecast previously.
Netflix added 1.16 million U.S. subscribers and 690,000 international subscribers to its online video-streaming service, and lost 630,000 subscribers to its domestic DVD service in the third quarter. Streaming subscriptions now number 29.41 million, of which 25.1 million are in the U.S. The company’s mail-in DVD subscription service now has a modest 8.61 million subscribers, down from 11.04 million at the beginning of the year.
The third quarter was certainly an improvement from the previous quarter, during which period Netflix added only 530,000 U.S. and 560,000 international streaming subscribers. Subscriber growth was not as strong as the first quarter of the year, however, when streaming subscription growth figured at 1.74 million in the U.S. and 1.21 million abroad.
Earnings for the quarter were 13 cents per share. Total revenue amounted to $905 million, up 9% year-over-year and matching analysts’ expectations exactly.
Still, investors reeled when Netflix adjusted its fourth-quarter guidance downward, sending the stock down 16% to $57.28 per share in after-hours trading. Instead of bringing in 7 million U.S. subscribers for the year, it now only expects a net growth of about 3.69 million domestic streaming subscribers and a loss of 3.17 million DVD subscribers.
Netflix expects to add 3.69 million international subscribers this year. Beyond the U.S., the company is currently operating in Canada, Latin America, the UK and Ireland, and plans to expand to Norway, Denmark, Sweden and Finland before the start of 2013.