Shares of Netflix fell 24% in after-hours trading after the company revealed that its third-quarter subscriber gain fell short of its estimates.
Still, company’s $1.4 billion in revenue met Wall Street expectations and its earnings of 96 cents per share surpassed analysts’ expectations of 91 cents, based on Bloomberg’s surveys.
Netflix fell $107.64 to $340.95.
In the U.S., Netflix added 1.3 million during the third quarter of 2014, compared to 1 million in the same period last year. International additions were also down slightly. Overall, the streaming giant added more than three million members and is now up to 53.1 million globally.
[quote_center author=””]For the fourth quarter of 2014, the company expects to add four million members, topping the 57 million mark. Its quarterly net income zoomed 84% year-over-year to $59 million. Revenue rose 28% to $1.4 billion.[/quote_center]
On a day in which the markets collectively fell — at the low point today the Dow was down 460.07 points or 2.8%, to $15,855.12 — Netflix followed suit and fell as the market opened. Then it dipped even lower, to $430.18, after news broke that HBO plans to launch its own streaming service in 2015. Netflix stock closed at $448.59, down 0.12%.
Netflix CEO Reed Hastings and CFO David Wells commented on HBO’s entry in a letter to shareholders released with the company’s earnings. “Starting back in 2011 we started saying that HBO would be our primary long-term competitor, particularly for content,” the wrote. “The competition will drive us both to be better. It was inevitable and sensible that they would eventually offer their service as a standalone application. Many people will subscribe to both Netflix and HBO since we have different shows, so we think it is likely we both prosper as consumers move to Internet TV.”
Earlier this month, Netflix saw another competitor fall to the side when Verizon and Redbox shut down its Redbox Instant streaming service.
And Netflix has made moves to expand its reach. It recently said that it had signed actor Adam Sandler to make four films. Also in the works: an IMAX sequel of the film Crouching Tiger, Hidden Dragon due in 2015.