Netflix (NFLX) announced the fiscal 2012 first quarter financial results in the after-hours trading, showing the company generated $870 million in net sales, an increase of 21% compared to a year ago; gross profit was $246 million, a loss of 12% year-on-year; operating loss reached $1.94 million, compared to an operating profit of $102 million last year same period; net loss was $4.58 million compared to a net profit of $60 million last year same period. Netflix delivered a net loss for the first time over nearly 7 years, but the loss of 8 cents per share is better than the average consensus estimate of 27 cents per share, in addition, the company also forecasted a net loss of 10-14 cents per share in the next quarter, better than the average analyst expectation of $18 per share.
Although the financial performance exceeded the estimates, NFLX stock price plunged 16.63% in the after-hours trading, due to the streaming subscription increment of the next quarter fell short of the market expectations. Netflix obtained new streaming subscribers of 1.7 million in this quarter in the United States, and predicted an addition of new subscribers of 190,000 – 790,000, which is far away from the previous average consensus estimate of 4.5 million. Netflix previously announced it would realize a $7 million increase of new subscribers in 2012, which is higher than the average market forecast of 5 million, but market analysts are skeptical about the Netflix’s ability to achieve this goal..
In last year Q4, Netflix separated the charges of the streaming media business and traditional DVD business, resulting in the dissatisfaction of some users, they vented their discontent on Facebook, affecting the Netflix brand to some extent. These negative factors caused NFLX stock price plummeted by 50% to around $60 per share, then NFLX stock price rallied strongly to above $100 per share. CEO Reed Hastings said in a letter to shareholders the company’s brand is recovering well in this quarter.
Netflix also said the company will continue its international expansion and the international users added by 1.21 million to 3.07 million in this quarter. The international business posted a net loss of $103 million on revenues of $43 million, which is also the primary reason for the losses of company. Netflix said it will continue to expand into Spain, Latin America, Canada and the United Kingdom.
NFLX stock price lost 4.02% in today’s regular trading and has accumulatively risen 46.98% since the beginning of this year.