(RTTNews) - Online-video streaming giant Netflix Inc. (NFLX), Thursday reported a second-quarter profit that fell short of Wall Street estimates, despite revenues increasing 25% driven by higher-than expected subscriber growth. Shares of the company tanked 10% in the extended trading session.
Netflix added 10.09 million subscribers globally in the quarter, above its forecast of 7.50 million, to end the quarter with 192.95 million subscribers. The company added 2.94 million customers in the U.S. and Canada region during the quarter, while EMEA region subscriber additions were 2.75 million, LATAM were 1.75 million and APAC were 2.66 million.
The company said subscriber additions largely reflect better-than-forecast acquisition and retention.
Netflix added 26 million new paid subscriber in the first half of 2020, which is far above the 12 million reported last year. Moving ahead, the company expects less growth for the second half of 2020 compared to the prior year.
Los Gatos, California-based Netflix's second-quarter profit rose to $720 million or $1.59 per share from $271 million or $0.60 per share last year. On average, 39 analysts polled by Thomson Reuters expected earnings of $1.81 per share for the quarter.
Netflix's revenues for the quarter rose 25% to $6.15 billion from $4.92 billion last year. Analysts had a consensus revenue estimate of $6.08 billion for the quarter.
The video-streaming service provider said average paid streaming memberships rose 25% and ARPU increased 0.4% year over year.
Looking forward to the third quarter, Netflix expects revenues of $6.33 billion and earnings of $2.09 per share. Analysts polled by Thomson Reuters currently expect earnings of $2.00 per share and revenues of $6.39 billion.
Further, the company appointed Ted Sarandos as co-CEO and elected to Board of Directors.
"Ted has been my partner for decades. This change makes formal what was already informal -- that Ted and I share the leadership of Netflix," says CEO Reed Hastings.
NFLX closed Thursday's trading at $527.39, up $4.13 or 0.79%, on the Nasdaq. The stock, however, slipped $54.09 or 10.26%, in the after-hours trade.
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