NEW YORK (
second-quarter earnings exceeded Wall Street's expectations, but the remainder of the year looks grim.
The Los Gatos, Calif.-based company reported earnings of $6 million, or 11 cents a share, on revenue of $889.2 million for the three months ended in June. The profit performance was below last year's equivalent earnings of $1.11 a share on revenue of $788.6 million but it did beat the average estimate of analysts polled by
for earnings of 5 cents a share on revenue of $888.9 million.
Unfortunately for Netflix investors, a forecast for a potential loss in the third and fourth quarters was weighing on the stock in after-hours action. The shares were last quoted at $68.75, down 14.5%, on extended volume of 2.5 million.
"This growth in each of our markets reflects our investment in an easy-to-use personalized selection experience, ever more compelling content, and higher quality streaming delivery" wrote CEO Reed Hastings and CFO David Wells in the company's earnings release. "Device by device, title by title, network by network, market by market, we are constantly improving our service."
sent a mixed message when it came to guidance.
The company officially forecast between a loss of 10 cents a share and a profit of 14 cents a share for the third quarter on revenue ranging from $890 million to $911 million, but the commentary sounded a much different note.
"Q3 has begun strongly for us, and we expect to be profitable again in Q3. In Q4, we will launch our next international market, which will drive us temporarily back into the red," wrote Hastings and Wells.
So not only could the third quarter still end up a loss but so could the fourth one as well.
Wall Street's current expectations are for earnings of 11 cents a share in the third quarter and a profit of 3 cents a share in the fourth quarter.
Written by Nathalie Pierrepont in New York.
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