Netflix lowers 4Q revenue, subscriber forecasts

Shares of the company fell $3.47, or 12 percent, to $25.50 shortly after the opening bell. The stock has ranged from $20.35 to $40.90 over the past year.

The Los Gatos, Calif.-based online movie rental service expects revenue between $353 million and $359 million for the quarter, down from its earlier projection of $357 million to $367 million.

Netflix affirmed its net income outlook of $18 million to $23 million, and increased its earnings-per-share guidance to a range of 30 cents to 38 cents from a prior estimate of 29 cents to 37 cents per share.

Analysts surveyed by Thomson Reuters on average forecast revenue of $364.8 million and earnings per share of 32 cents for the fourth quarter.

Netflix expects to end the year with 8.95 million to 9.25 million subscribers, down from its previous projection of 9.1 million to 9.7 million

The company said it expects to post third-quarter net income of $16 million to $21 million, or 26 cents to 34 cents per share, within prior guidance.

Revenue should come within the expected range of $343 million to $348 million, excluding a one-time $6.5 million credit given to subscribers for service interruption in August, Netflix said.

Analysts expect revenue of $345.8 million and earnings of 31 cents per share.

At the end of the third quarter, Netflix had 8.67 million subscribers, up 23 percent from a year ago and 3 percent from the second quarter. Previously, the company forecast between 8.68 million and 8.88 million subscribers by the end of the third quarter.

Barry McCarthy, Netflix's chief financial officer, said net subscriber growth was "unusually weak" in August. He said that while business improved in September, performance was below initial expectations likely due to the weak economic environment.

Netflix is scheduled to report third-quarter earnings on Oct. 20.