Netflix (NASDAQ:NFLX) shares tumbled after the company projected a slowdown in growth of U.S. streaming customers. Shares fell nearly 14 percent by close in New York, the biggest single day drop since October 25, when Netflix reported a net subscriber loss for the third quarter. The stock has since retreated over 26 percent, and is down 71 percent from the all-time closing high of $293.73 set in July 2011.
CEO Reed Hastings cited higher seasonal customer turnover for the slowdown. The company is facing increased competition from services like Comcast’s (NASDAQ:CMCSA) Streampix and Verizon’s (NYSE:VZ) online venture with Coinstar’s (NASDAQ:CSTR) Redbox. While Netflix may post a second-quarter profit, investors are more focused on subscriber additions, and whether the company will be able to continue to grow as more and more services arrive on the market.
Netflix announced yesterday on its website that it will end the second quarter with 23.6 million to 24.2 million domestic online subscribers, up from 23.4 million on March 31, the last day of the first quarter. That suggests 200,000 to 800,000 new subscribers, down from an addition of 1.74 million in the first quarter.
Netflix posted a first-quarter net loss of $4.58 million, or 8 cents a share, due to expenses from expanding into Latin America and the U.K. However, the loss was significantly smaller than it had predicted in January. Furthermore, sales rose 21 percent to $869.8 million, and subscriber growth was on par with analysts’ projections.