The company's stock was down more than 13 percent in early after-hours trading in response to the news.
Netflix posted its earnings report for the June quarter today and revealed that it added 5.15 million subscribers for the quarter. Global subscriber net additions are projected at 4.35 million, again, below the average 5.095 million.
The company reported quarterly revenue of $3.91 billion and earnings per share of 85 cents.
With all this, the stock is tanking.
Well to many adding 4.47 million subscribers and hitting a new all-time high in subscribers sounds great to wall street they wanted to see a higher subscriber count.
Netflix said operating margins would be narrower than previously expected because of the rapid strengthening of the USA dollar, which appreciated by more than 5 percent against major trading partners' currencies in the second quarter. "As of June 30, Netflix had 130 million subscribers, including 57.4 million in the U.S".
Domestic subscriptions were even lower - less than a million Americans signed up for the service during the past three months - and the numbers fell 37 per cent short of Pivotal Research Group's estimate of 1.2 million.
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Commenting on the reaction of shareholders Eric Schiffer, chief executive of private equity firm Patriarch, said: "Investors are devastated by Netflix's Q2 projection that went down in dramatic flames".
"The quarter is a reminder that Netflix's cadence of net adds is not linear, but lumpy in nature", said Justin Patterson, an analyst with Raymond James and Associates in San Francisco, while pointing to the absence of a new hit series as a driver.
Netflix added 670,000 subscribers in the United States, well below analysts' estimates of 1.19 million, according to Thomson Reuters I/B/E/S. Revenue climbed 6 percent to $3.9 billion.
"After four consecutive quarters of beating its own guidance, and analysts' expectations on key metrics such as revenues, profits, and subscriber gains, Netflix disappointed with a weak Q2", said eMarketer principal analyst Paul Verna. However, the company took the opportunity to brag about overtaking HBO in the Emmy nomination race this year, breaking the latter's 17-year run.
Netflix is expected to face increasing competition in the next year or two. Walt Disney plans to launch a rival streaming service in 2019.
"Our strategy is to simply keep improving", Netflix said.