Netflix Inc.’s stock initially plunged in after-hours trading Tuesday, after the streaming giant posted weaker subscriber growth and forecast a smaller profit than Wall Street expected. But shares later erased most of their losses on company disclosures that its new ad-supported service is a success and its crackdown on shared accounts in the U.S. is coming this quarter. Netflix
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reported that subscribers increased by 1.75 million in the first quarter of the year, missing analysts’ average estimate of 2.2 million. Netflix reported fiscal first-quarter net earnings of $1.31 billion, or $2.88 a share, compared with $3.53 a share in the year-ago quarter.
Revenue improved to $8.16 billion from $7.87 billion a year ago. Analysts surveyed by FactSet had expected on average net earnings of $2.86 a share on revenue of $8.18 billion. For the second quarter, Netflix executives guided for earnings of $2.84 a share on $8.24 billion in revenue, while analysts on average were expecting earnings of $3.07 a share on sales of $8.18 billion. Netflix no longer provides guidance on subscriber additions, a sign its years of rapid growth are clearly cooling. Also see: As the original Netflix dies, a new era of ads and password crackdowns is born Shares plunged 10% lower, below $300, in after-hours trading immediately following the release of the results, after closing the regular session with a 0.3% increase at $333.70. After briefly crossing into positive territory, shares ended the extended session down just 0.2%. In their first video earnings call without company co-founder and former CEO Reed Hastings, Netflix’s executive team c …
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