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.