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Netflix falls 15% after missing subscriber expectations

ICE Graveyard 18/07/2016 Katie Roof

Netflix reported earnings after the bell on Monday, seeing its shares quickly tumble 15% in after-hours trading after missing the mark on subscriber growth.

In the second quarter of the year, the digital entertainment company added just 1.7 million members, beneath the company’s own forecast of 2.5 million new customers. This is also significantly below the 3.3 million members that Netflix added in the same period of last year. The company now has 83 million total subscribers.

“We are growing, but not as fast as we would like or have been,” said the letter to shareholders. “Disrupting a big market can be bumpy.”

The company said that part of the reason for the disappointing quarter was that “churn picked up slightly and unexpectedly.” They blame this on press coverage about price increases.

Net income was $41 million for the period, compared to $26 million last year. Earnings per share was at 9 cents, up from 6 cents last year.

Netflix shares closed Monday at $98.81. Shares were down 14% year-to-date.

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