Netflix Takes It On The Chin In Q3 Financial - Twice

Netflix Takes It On The Chin In Q3 Financial

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Los Gatos, Calif. -

Netflix

sent the price of its stock tumbling after posting its third-quarter financial statement Monday.

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 streaming-video service.

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 He also rescinded a plan to split the disc-by-mail business off to a new website called Qwikster.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.

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