Boston, MA 10/16/2014 (wallstreetpr) – Netflix, Inc. (NASDAQ:NFLX) stock was crashing after investors became concerned about the company’s failure to attract new subscribers in the third-quarter. The company added 3 million subscribers in the quarter against estimates of 3.7 million. Failure to hit the target has already been attributed to over-forecasting by the company’s CEO, Reed Hastings.
Profits Nearly Double
Despite the poor show on the subscription front, the giant streaming company nearly doubled its profit that came in at $59 million compared to $32 million a year ago. Netflix, Inc. (NASDAQ:NFLX) seems to be doing well on the international front after debuting in Germany and France. The company added a total of 2 million subscribers in the international markets compared to only one million domestically bringing its total members to 56 million.
A revision of the company’s monthly subscription by $1 continues to be cited as one of the reasons why many people are shying away from signing up. New hit series ‘Orange’ has also failed to take the company’s huge following by storm. The giant streaming company remains confident of its prospects in the fourth-quarter where it expects to topple the three million subscription addition in the third quarter with a total of 4 million new subscriptions.
HBO Threat
Entry of new competition into the Internet-TV business is also expected to affect Netflix numbers going forward. HBO has already highlighted plans to enter the internet-TV subscription business which should be the icing on the cake in terms of competition. Subscribers are expected to be the main beneficiary of any potential rivalry between HBO and Netflix, Inc. (NASDAQ:NFLX) in terms of lower subscription fees.
Hastings also pointed out that they had expected HBO to make such a move as more people continue to switch cable and satellite TV models. Hastings remains confident that the addition of HBO won’t be bad for business in terms of competition as it is only a single player.
Shares of Netflix Inc. (NASDAQ:NFLX) tank by as much as 26.44% to close at $330 in after hours trading.
