Los Gatos, Calif. - Netflix
sent the price of its stock tumbling after posting its third-quarter financial
The report showed increases in profit and revenue tempered by sharply
lower U.S. subscriber totals, down a whopping 800,000 following its decision
this summer to raise disc rental prices and split the business off from its
Net income for the quarter rose 65 percent to $62.5 million as sales
rose 49 percent to $821.8 million.
U.S. subscribers fell to 23.8 million as of Sept. 30, from 24.6
million three months earlier.
The company's CEO Reed Hastings had previously apologized for
poorly communicating the price increase and business-split plans. He also rescinded
a plan to split the disc-by-mail business off to a new website called Qwikster.
But the price increases remained in place.
Netflix projected profit declines for a few quarters starting in
the first period of 2012, as the company takes on added costs from its plans to
expand into the United Kingdom and Ireland. It also said it will refrain from
further international expansion as it attempts to strengthen brand reputation.
Hastings reportedly said the company's focus moving forward will
not be to reclaim lost subscribers but to build back its reputation and brand
strength by improving the service and adding more content.
The company will work to improve the Netflix user interface,
expand the number of platforms carrying the service and beef up content
libraries, Hastings said.
Following the quarterly statement, Netflix stock dropped more
than 75 percent from its peak of $304.79 on July 13.