Netflix sees 600K bump in US subscribers, but shares slump nonetheless

Netflix said it had seen major increases in US subscribers. And yet the Q2 2013 numbers missed some analyst estimates. 

Reuters
Netflix shares dropped today by as much as 6 percent.

Netflix added more than 600,000 subscribers to its US streaming service in the second fiscal quarter of 2013. Still, in trading on Tuesday, Netflix shares tumbled by as much as 6.2 percent – an ominous sign for the California company. 

The reason for the plunge was twofold. For one, although 630,000 new Netflix subscribers – now 29.8 million US streaming subscribers overall – is a solid number, it fell short of the 700,000 new subscribers some analysts had forecasted. Similarly, revenue in the last quarter was "only" $1.069 billion, compared with the predictions of $1.072 billion in revenue. 

In an interview with USA Today, Michael Pachter, an analyst at Wedbush Securities, called the results "utterly disappointing," and pointed out that the 630,000 figure was "barely up year-over-year." (Last Q2, Netflix added 530,000 new US subscribers.) 

Part of the frustration may stem from the fact that Netflix is making a big (and seemingly successful) bid to become a kind of online-only HBO.

Over the past year, the company has debuted several new original series, from the critically-acclaimed "Orange is the New Black" to the political soap opera "House of Cards," which was nominated for a spate of Emmys, including Best Actor and Best Series. 

But Netflix seems to have trouble converting that buzz into the kind of earth-shattering subscriber numbers analysts such as Mr. Pachter would like to see. 

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