The action Netflix drop, big disappointment on the number of subscribers

(Reuters) – Netflix (NASDAQ:NFLX) reported second-quarter growth far below expectations in the number of new subscribers, causing a drop of 14% in the title of the american group of online videos in after hours Trading.

The company has attracted 5.2 million new subscribers in the period April-June, a million less than anticipated according to data from Thomson Reuters I/B/E/S, despite of new offerings, including the series “Lost in Space” and new episodes of “Jessica Jones” and “13 Reasons Why”.

“We had a strong second quarter, but not extraordinary,” said Netflix in a quarterly letter to its shareholders. The company added that it had “overestimated” the quarterly fluctuations in the level of subscriptions.

Prior to these announcements, the price of Netflix had been multiplied by two since the beginning of the year, while the S&P-500 had taken at 3.7%. The title is heavily subsided on Monday in after hours Trading, from 14% to 343,60 dollars.

“Investors are catastrophés by the flop of the prediction of the Q2 Netflix. Now the forecast is suspect, which undermines the recovery”, said Eric Schiffer, ceo of the private equity fund Patriarch.

Wall Street was betting on a spectacular growth in the number of its customers in a context of growing demand for online entertainment in the world. Netflix committed to heavy spending to attract new customers. The group planned to spend up to eight billion dollars in tv series and films this year.

Netflix has attracted 670.000 new subscribers in the United States, against 1.19 million advance, and $ 4.47 million to the international counter 4,97 million expected by analysts.

The net profit amounted to 85 cents per share, supéireur the consensus of 79 cents. The turnover has increased by 40.2% over the period, to 3.91 billion while analysts were expecting the 3.94 billion.

The group table also over five million new customers in the current quarter, particularly in India.

It announced that its operating margins would be less strong than previously because of the rise in the dollar.

Netflix is also facing the competition of the two giants, Disney and Amazon (NASDAQ:AMZN).com and Apple (NASDAQ:AAPL), who rely also on online video, just as AT&T, which plans to invest in HBO after they took control of the cable channel with the acquisition of Time Warner.

In his letter to shareholders, Netflix said it expected more competition to the international, including the ProSiebenSat 1 Media in Germany and Salto in France.

“Our strategy is simply to continue to improve ourselves,” said Netflix.

(Lisa Richwine and Vibhuti Sharma, Juliette Rouillon for French service, edited by)