Netflix’s third-quarter 2012 earnings report just came out, with revenue reaching $905 million for the quarter, up from $822 million last year. It’s also in line with Wall Street’s consensus forecast of $904 million. It reported earnings per share of $0.13, compared to $1.16 last year and above analyst expectations of $0.05 a share.
But all eyes were on the subscription video company’s subscription numbers, as it tries to jumpstart lagging growth in the U.S. while also growing overseas. Netflix reported 25.1 million U.S. subscribers for the quarter, adding 1.16 million in the quarter. That’s compared to its forecast of 1 million to 1.8 million new adds.
The company previously forecast that it would add 7 million domestic subscribers this year, and had added 2.1 million through the first half. The fourth quarter is always huge for Netflix, as people sign up during the holidays as they receive Netflix-capable streaming devices. But it still faces challenges in reaching that forecast over the next few months.
On the international side, it added 690,000 new subscribers, bringing its total customer count overseas to 4.31 million. While Netflix was profitable for the second and third quarters, the company expects to post a loss in the fourth quarter, as it focuses on expanding into the Scandinavian countries of Norway, Denmark, Sweden, and Finland. That’s its fourth big international market, after first launching in Canada, followed by Latin America and the U.K. and Ireland. As U.S. growth slows, it will be more and more dependent on those international markets to expand its revenue and earnings potential.
Netflix expects domestic subscriptions at the end of the fourth quarter around 26.4 million to 27.1 million, with revenue of $581 million to $588 million. International streaming subs are expected to rise to 5.2 million to 5.9 million, with revenue of $90 million to $100 million. Domestic DVD subs are expected to be between 7.85 million and 8.15 million, with revenue between $248 million and $255 million. Earnings could range between a loss of 23 cents per share or a gain of 4 cents a share.
As a result of the lower-than-hoped-for subscriber numbers, Netflix’s shares are down substantially in after-hours trading. Shares are down about $10, or 15 percent, since the release of its earnings numbers.
Netflix is the world’s leading Internet television network with more than 33 million members in 40 countries enjoying more than one billion hours of TV shows and movies per month, including Netflix original series. For one low monthly price, Netflix members can watch as much as they want, anytime, anywhere, on nearly any Internet-connected screen. Members can play, pause and resume watching, all without commercials or commitments. Learn more about how Netflix (NASDAQ:NFLX) is pioneering Internet television at...