In after-hours trading on Monday, Netflix shares sunk 14 percent to $343.60, eroding $24.2 billion in market capitalization and down from an earlier close of $400.48. It marked the first time in a more than a year that Netflix hadn't exceeded its subscriber growth projections. Global subscriber growth also fell far short, as Netflix added 4.47 million against an expected 4.97 million. All told, Netflix now boasts upwards of 130 million subscribers across the globe.
"We never did find an explanation to that other than lumpiness in the business", Chief Executive Officer Reed Hastings said.
Earnings per share came in at 85 cents, beating analyst forecasts of 79 cents.
Bringing in more subscribers and money is vital for Netflix because it expects to keep spending more on exclusive TV shows and movies to try to stand out from rivals. That's compared with analyst estimates that Netflix would have Q3 net adds of 947,000 in the US and 5.05 million internationally. Analysts had expected revenue of $3.94 billion.
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The news of just 5.2 million total subscriber adds was especially pointed for Wall Street given Netflix's addition of 7.4 million in the first quarter, well ahead of the 6.5 million projected then.
Investors value Netflix at a far higher level than other media companies of similar size because of that potential for future growth.
For the current quarter, the company is projecting revenue of $3.988 billion, below the consensus for $4.126 billion.
Netflix is still expecting a big second half of 2018 with many new hit shows still to come and several big deals. The company called its performance in the second quarter "strong but not stellar".
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We were honored last week with the most Emmy nominations of any network.
Apple, the world's most valuable company, is spending about $1bn on original programming for a video service of its own.
In the letter to shareholders, Netflix said it expected more competition from worldwide players including ProSiebenSat 1 Media in Germany and on-demand service Salto in France.
Competition in the streaming television market includes YouTube, a platform under the umbrella of Google parent Alphabet, and entertainment titan Disney, along with AT&T.
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