Netflix, Inc. beat earnings estimates for the first quarter, but shares of the streaming media company took a hit in after-hours trading Monday after it reported weaker-than-expected new subscriptions for the period.
The slowdown came despite the release of popular new titles, including the superhero-themed "Marvel's Iron Fist" and the kid-oriented "A Series of Unfortunate Events."
For the quarter that ended March 31, Netflix reported earnings of 40 cents per share, beating analyst estimates and the company's own guidance. Revenue came in at $2.64 billion, which was in line with expectations.
Analysts estimated Netflix would earn 37 cents a share, up from 6 cents a share in the same quarter last year. Revenue was projected to increase 35 percent year over year to $2.64 billion in the first quarter.
Netflix shares have been trading at near record levels. However, investors have been closely watching for signs of a slowdown in growth as the company reaches nearly 100 million subscribers.
The Los Gatos, Calif.-based company reported net subscription additions of 4.94 million for the quarter, falling shy of its guidance.
The streaming giant had forecast an addition of 5.2 million new subscribers from January through March 2017, compared with 6.74 million added during those three months last year.
Other new titles to debut in the quarter included "Santa Clarita Diet" and the reality series "Ultimate Beastmaster." The last day of the quarter saw the debut of the millennial-focused dramatic series "13 Reasons Why."
Shares dropped by as much as 3 percent in after-hours trading as investors reacted to news that Netflix's subscriber growth has slowed.
Shares had closed Monday at $147.24, up 3 percent. Shares have been up nearly 20 percent this year and reached a record on March 30, when they climbed to $148.
Netflix, which has been rapidly expanding globally as its business in the U.S. slows, predicted that profit will drop in the second quarter as the company spends more on new series and movies.
