By ,
Published January 13, 2015
Online DVD rental company Netflix Inc. (NFLX) Thursday reported a quarterly loss stemming from higher marketing spending aimed at bolstering its subscriber rolls to 4 million by year's end.
Netflix's posted a first-quarter loss of $8.8 million, or 17 cents per share, compared with a loss of $5.8 million, or 11 cents per share, in the year earlier quarter.
The Los Gatos, Calif.-based company's shares were down 6 percent in after-hours trade at $11.45, after closing at $12.15 on Nasdaq Thursday.
First-quarter revenue was $154.1 million, compared with $100.4 million a year earlier. Wall Street had expected a first-quarter loss of 20 cents per share, according to Reuters Estimates.
The company, which had forecast a $16 million to $19 million net loss in the first quarter, estimated it would post a $2.2 million to $7.2 million loss in the second quarter on revenue of $160 million to $165 million.
Netflix said it would end the second quarter with 3.1 million to 3.2 million subscribers, and the fiscal year with 3.85 million to 4.15 million subscribers, unchanged from earlier guidance.
The company forecast a fiscal year net loss of $5 million to $15 million on revenue of $660 million to $685 million.
Despite a price war with Blockbuster Inc's (BBI) online rental service, Netflix saw its subscriber base rise 56 percent year-over-year, to 3.02 million in the first quarter.
But the cost to acquire those subscribers rose to $37.89 in the first quarter of 2005 from $35.12 during the same period last year, while churn, the number of subscriber cancellations, rose to 5 percent from 4.4 percent a year earlier.
Netflix reported a gross margin of 38.4 percent in the first quarter, compared to 43.6 percent in the same period of 2004.
https://www.foxnews.com/story/netflix-posts-loss-amid-marketing-costs