Netflix added about 2 million net new subscribers in the second quarter -- but the movie-rental company expects the pace to fall off significantly in the current quarter following its major pricing change that angered many customers.
As of the end of June, Netflix had 25.56 million subscribers (24.6 million in the U.S., 970,000 in Canada), up 70% from the year-ago period. Netflix expects to add 190,000 to 1.29 million subscribers in the current quarter ending Sept. 30.
On the weak outlook, Netflix's stock was down more than 9% in after-hours trading Monday, down to $26.88 to $254.65 per share.
Overall, for the quarter ended June Netflix posted revenue of $789 million -- slightly below analyst expectations of $791.5 million -- and net income of $68 million. Churn in the U.S. business increased to 4.2%, up from 3.9% in the first quarter and 4.0% in the year-earlier period.
Netflix outraged many customers with a price change announced July 12 that amounts to an increase of 60% in fees for those who want both DVDs-by-mail and streaming services. Wall Street analysts said the price change is designed to push subscribers toward the more-profitable streaming-only option.