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Netflix shares sink as outlook disappoints
[SAN FRANCISCO] Streaming television star Netflix saw its shares sink Monday after better-than-expected quarterly earnings were offset by disappointing forecasts for subscriber growth in coming months.
California-based Netflix reported profit climbed a bit to US$28 million while revenue from streaming television subscriptions rose to US$1.8 billion from US$1.4 billion in the same period a year earlier.
"We are off to a great start in 2016," Netflix co-founder and chief executive Reed Hastings said in a letter released with the quarterly earnings figures.
"As we've made vast improvements in our service and content, consumers see even more value and our membership grows."
Netflix memberships grew a record high 6.74 million in the quarter, hitting 81.5 million worldwide, with some 42 per cent of those outside the United States, the company reported.
The streaming television pioneer in January significantly expanded its global footprint to 190 countries, making its Internet TV service available in 130 new markets including India - but not China.
Netflix, which began as a mail-order DVD service but is now producing award-winning original content alongside its offering of older shows and movies, launched in 2007.
Hastings called it the birth of a "global Internet TV network". The financial market apparently focused on a Netflix forecast that it expected to add 2.5 million members in the current quarter, compared with 3.28 million net additions in the same three months of last year.
Netflix shares sank more than 10 per cent to US$97.40 in after-market trades that followed release of the earnings figures.
Shares had closed the trading day down slightly after news that online commerce titan Amazon had begun letting people in the US subscribe monthly to a standalone streaming service which would not require a full subscription to its Prime service.