Netflix (NFLX) -) posted much a stronger-than-expected number of subscribers to its streaming service over the second quarter, the group said Wednesday, although its crackdown on password sharing, as well as its multi-tiered ad service, pressured overall revenues.
Netflix said profits for the three months ending in June were pegged at $3.29 per share, up 2.8% from the same period last year and well ahead of the Street consensus forecast of $2.86 per share.
Group revenues, Netflix said, came in at $8.19 billion, up 2.9% from last year and modestly shy of analysts' estimates of an $8.29 billion tally. The group added 5.89 new subscribers over the quarter, smashing the Street forecast of just over 1.8 million.
New members were allowed to choose from three different paid options, starting at $6.99 per month for an ad-supported service. That cost could rise to as much as $19.99 per month, with an additional $7.99 for each extra user linked to the household password.
Netflix, which no longer provides specific guidance on new subscriber additions, said its sees earnings in the region of $3.52 per share and revenues of $8.52 billion for the September quarter, again shy of Street forecasts of around $8.7 billion.
"While we’ve made steady progress this year, we have more work to do to reaccelerate our growth," Netflix said. "We remain focused on: creating a steady drumbeat of must watch shows and movies; improving monetization; growing the enjoyment of our games; and investing to improve our service for members."
Netflix shares were marked 5.1% lower in after-hours trading immediately following the earnings release to indicate a Wednesday opening bell price of $453.72 each.
Netflix rolled out the first phase of its "paid sharing" effort earlier this spring in Canada, New Zealand, Spain and Portugal, and launched its main U.S. focus on May 23.
Netflix has said password sharing, which involves an estimated 100 million households that aren't currently paying for the service, "undermines our long-term ability to invest and improve."
Analysts have also said Netflix's new password-sharing crackdown, which uses location-services data, could provide an offsetting revenue spike as users pay the added fee required to use a device to access Netflix at different locations.
