Netflix Feels the Heat

"After increasing immediately following the April 15 announcement of the June 15 price increase, the subscriber cancellation rate recovered and since late May, has returned to the rate and the pattern the company experienced in the comparable period last year," the company said. Churn includes free trial subscribers as well as paying subscribers who elect not to renew their monthly subscription service during the quarter.

Netflix issued quarterly guidance that was roughly consistent with existing forecasts. The company expects to post non-operating earnings of $10.2 million to $13.7 million on revenue of $141 million to $145 million in the third quarter, and non-operating earnings of $12.5 million to $18.5 million on revenue of $150 million to $160 million in the fourth quarter.

Analysts were looking for earnings of 20 cents on revenue of $141.0 million in the third quarter and earnings of 19 cents a share on revenue of $157.9 million in the fourth quarter.

The company expects to end the third quarter with 2,150,000 to 2,350,000 subscribers, and end the fourth quarter with 2,400,000 to 2,700,000.