Netflix’s financial data hit a pothole in its second-quarter earnings when it came to subscriber number expectations -- and its stock took a steep hit.
Netflix added 5.2 million net subscribers -- 670,000 in the U.S and 4.5 million globally. Analysts were expecting a total improvement of 6.2 million net additions. Netflix has now 57.4 million U.S. subscribers and 72.7 million internationally.
Second-quarter revenue was up 39% to $3.9 million, that's from its $2.8 billion in the same period a year. Net income was at $384.3 million -- up from nearly six times from $65.6 million.
Minutes after releasing its results, its stock was down 14% to $343 in after-market trading. Some analysts caution a pull-back was in part warranted. Year to date, the stock is up 109%.
Netflix has been dramatically increasing its marketing spending in the period -- $526.8 million, more than double its $274.3 million spent in second-quarter 2017.
In its second-quarter earnings letter to shareholders, Netflix talk up its growing competitors:
“YouTube and Netflix are two leading global (ex-China) internet entertainment services. HBO and Disney are evolving to focus on internet entertainment services. Amazon and Apple are investing in content as part of larger ecosystem subscriptions.”
It added: “Each of these firms has unique content and is striving to find the best creators from around the world to entertain its viewers. There has never been a better time to be a creator or consumer of content.”