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Netflix shares rebound as execs soothe investors

Netflix shares fell sharply Wednesday after the media company met earnings expectations but fell short of projections for U.S. subscriber growth.

The streaming giant posted third-quarter earnings of 7 cents per share on $1.74 billion in revenue, just missing analysts' expectations for 8 cents per share on $1.75 billion in sales, according to a consensus estimate from Thomson Reuters. Its shares fell as much as 14 percent in extended trading before gaining back most of the losses during a webcast with executives.

Netflix added 880,000 new U.S. members in the quarter, much lower than the 1.19 million analysts expected, according to StreetAccount. It attributed the subscriber sluggishness to higher-than-expected "involuntary churn," as user transition to chip-based credit and debit cards made account renewals more difficult.

"It's likely multifactor, but certainly the transition to chip cards is not helping," said David Wells, chief financial officer of Netflix, after the results.

Reed Hastings, CEO of Netflix.
Mark Neuling | CNBC
Reed Hastings, CEO of Netflix.

Shares of Netflix, known for original series like "House of Cards" and "Orange is the New Black," have enjoyed a torrid run. The stock soared more than 125 percent this year ahead of the results.

International net additions totaled 2.74 million, beating Wall Street's projection of 2.46 million. Netflix has spent heavily on reaching new global markets.

In the webcast, CEO Reed Hastings did not comment on the success of specific international markets. However, he said "every market is growing."

The company announced last week it would increase the price of its standard monthly plan by $1 to $9.99, starting in November. Existing customers will continue to pay $8.99 for the package until next October.

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Hastings said he was not worried about pricing consumers out of Netflix, as the standard definition offering will stay at $7.99 per month. Service remains "highly available," he said.

Netflix added that its spending will increase in the fourth quarter as it launches in Spain, Italy and Portugal. Last month, the company said it would expand into South Korea, Singapore, Hong Kong and Taiwan in early 2016 as it looks to roll out service globally by the end of that year.