Netflix (Nasdaq: NFLX) beat earnings estimates and increased profits last quarter. So why is the stock tanking after hours?
Apparently investors didn’t like the online video giant’s semi-ominous third-quarter forecast. That’s the only thing that could explain the stock’s 15% drop in the first 20 minutes of the market closing.
The company said that a loss – perhaps as much as 10 cents per share – is possible in the third quarter as it spends money to broaden its international reach.
The after-hours slide pushed Netflix shares – which had been recovering nicely since a mid-June dip – back below $70. The tech stock’s 52-week low is $60.70 a share.
Though it didn’t show up in the stock price, this afternoon’s earnings report offered some encouraging signs for the much-maligned company.
Netflix’s sales rose to $889.6 million from $788.6 million a year ago. The company also added 1.1 million subscribers to its video-streaming service.
But the company warned that it might not reach its goal of adding 7 million new online U.S. subscribers this year.
Regardless, the positives seemed to outweigh the negatives. Once the knee-jerk reaction, sky-is-falling trades die down, look for the stock to possibly bounce back quickly from today’s after-hours slaughter.