Netflix loses 800,000 customers in 3Q
Netflix lost its luster among consumers and investors after the company raised prices as much as 60 percent in the United States and bungled an attempt to spin off its DVD-by-mail rental service. (Oct. 24, 2011) Credit: Getty Images
Netflix's video subscription service lost 800,000 customers in the third quarter -- the biggest exodus in its history -- even as its earnings rose 65 percent.
The losses were larger than management had previously warned. The unwelcome surprise, contained in financial results released Monday, was compounded by a forecast calling for millions of Netflix Inc.'s DVD-by-mail subscribers to cancel the service in reaction to a dramatic price increase that took effect last month.
The bad news bruised the already battered stock as shares plunged more than 20 percent.
Netflix lost its luster among consumers and investors by raising prices as much as 60 percent in the United States and bungling an attempt to spin off its DVD-by-mail rental service.
The company, based in Los Gatos, Calif., ended September with 23.8 million U.S. subscribers, down about 800,000 from June. Netflix had predicted it would lose about 600,000 U.S. subscribers in a forecast released last month.
Netflix earned $62.5 million, or $1.16, per share, in the third quarter, compared to $38 million, or 70 cents per share, at the same time last year. Netflix shares closed up $1.80, or 1.54 percent, to $118.84 but plunged as much as $31.99 in early-evening after-hours trading.
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