Netflix Shares Fall Following Q2 Earnings

Netflix, Inc. NFLX shares took a big hit after reporting a second-quarter earnings Wednesday afternoon.

Earnings came in at 60 cents per share, beating estimates by 4 cents. Sales came in at $4.923 billion, missing estimates by $7 million. The company said 2.7 million paid memberships added during the quarter, down from 5.5 million year-over-year

Netflix sees third-quarter EPS of $1.04 and sales of $5.25 billion, in line with estimates.

"Our missed forecast was across all regions, but slightly more so in regions with price increases," the company's shareholder letter said. "We don’t believe competition was a factor since there wasn’t a material change in the competitive landscape during Q2, and competitive intensity and our penetration is varied across regions (while our over-forecast was in every region).

"Rather, we think Q2’s content slate drove less growth in paid net adds than we anticipated. Additionally, Q1 was so large for us (9.6m net adds), there may have been more pull-forward effect than we realized.

Netflix's stock traded lower by more than 11% to $322.08 in after-hours trading. The stock closed at $362.44.

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