LOS ANGELES (AP) ? Netflix slashed its prediction of how many U.S. video streaming subscribers it would add this year after subpar third-quarter results, causing a sharp sell-off in its stock in after-hours trading.
The Los Gatos, Calif.-based video streaming company said it added 1.2 million net subscribers in the U.S. in the three months through September, which was on the low end of its previous forecast of gains between 1 million to 1.8 million.
The shortfall caused Netflix to cut its estimate for full-year U.S. streaming subscriber additions to between 4.7 million and 5.4 million. Previously, Netflix predicted it would gain as many as 7 million domestic streaming subscribers by year's end. It ended the quarter with 25.1 million U.S. streaming customers and 4.3 million in other countries.
Netflix's stock sank $11.55, or 17 percent, in after-hours trading to $56.67.
In the latest quarter, the company earned $7.7 million, or 13 cents per share, beating the 5 cents per share expected by analysts polled by FactSet.
Revenue rose 10 percent to $905.1 million, in line with forecasts.
Netflix has said it would be spending the money it makes in the U.S. to fund an ambitious overseas expansion. But slowing growth at home looks likely to put a damper on that enthusiasm.
This month, Netflix rolled out streaming services in Denmark, Sweden, Norway and Finland. It already operates in Canada, the U.K., Ireland and several Latin American countries.
The latest push will boost its international losses to a "peak" in the final quarter of the year, according to a letter by chief executive Reed Hastings and chief financial officer David Wells.
"We intend this to be our peak quarter of international losses, and expect international losses will decline quarter by quarter next year," they said in a statement. "Once we've substantially reduced international losses, and with Netflix then being solidly profitable on a global basis, we will launch our next round of international expansion."
Netflix predicted that its fourth-quarter earnings would range between a loss of $13 million, or 23 cents per share, and a gain of $2 million, or 4 cents per share. Analysts were expecting a loss of 5 cents per share.
The worst-case loss predicted by the company would push it into the red for the year, which would give the company its first annual loss in a decade.
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Business Writer Michael Liedtke in San Francisco contributed to this report.
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