Netflix Releases Q2 Results, Investors Nervous About Future

From DailyTech: Netflix has established itself as a force to be reckoned with, but after deciding to change its subscription plans and prices, investors are wondering if the DVD rental/video streaming company can maintain its momentum.

Netflix recently released its second-quarter financial results for 2011, and the report was full of ups and downs. Despite successful Q2 results, investors fear for the future of Netflix after the price hike takes place. Effective September 1 (or immediately for new members), Netflix will boost the DVD/video streaming bundle from $9.99 to $15.98, and separate DVD plans from video streaming plans at $7.99 for one or the other.

Netflix posted $68 million in net earnings for Q2 2011, which is $1.26 per share. This exceeded analyst's expectations, which was around $1.11 per share. The net gain saw a 55 percent increase compared to second-quarter 2010.

In addition, the company managed to add nearly 2 million new subscribers in the second quarter, bringing its grand total to 25 million users. The streaming-only plan in particular gained popularity with 75 percent of new subscribers signing up for it.

But the report had some downsides as well. For instance, the global revenue came in at $789 million, which is a 52 percent increase from Q2 2010, but analysts were hoping for at least $791.50 million. Also, Netflix expected earnings for the current quarter to be between 72 cents and $1.07, and analysts expected $1.09.

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