Netflix Inc , accustomed to delivering stunning growth, failed to wow investors as it issued an earnings outlook that fell short of expectations.

Shares of Netflix fell 5 percent after its report, a sign that anything less than perfect performance will not suffice for a company whose stock has nearly tripled over the past year

The movie rental service's first quarter earnings and revenue surpassed expectations -- and it built up its subscriber base to more than 23 million customers -- but it was the earnings outlook that caught the attention of investors.

Netflix is very much a momentum stock, said Brett Harriss, an analyst with Gabelli & Co. We didn't get a blockbuster quarter and guidance was a little light.

Specifically, Netflix said it would likely earn between 93 cents and $1.15 a share in the second quarter, compared with analyst expectations of $1.19 a share.

One concern analysts pointed to was Netflix's international business, considered critical to its growth over the next several years. So far, it has entered Canada, where it now has just over 800,000 subscribers after seven months of business.

But expansion in Canada -- and plans to move into other markets -- is coming at a cost. The company expects to post a $50 to $70 million operating loss in its international business during the second half of the year, steeper than the $50 million it previously projected.

Atul Bagga, an analyst with ThinkEquity, said concerns about Netflix's outlook and the money its investing for its international business were overblown. In my view, that opportunity is just getting going, he said.

Netflix has raised expectations by producing out-sized subscriber additions quarter after quarter. Netflix ended the first quarter 23.6 million subscribers, more than Comcast Corp, the largest U.S. cable company.

In the first quarter of 2011 it added 3.3 million domestic subscribers, nearly double the number added during the period a year ago, highlighting its success in its transition from a mail-order business to one that increasingly delivers its movies and TV shows over the Web.

Netflix posted earnings of $60.2 million, or $1.11 a share -- up from $32.3 million, or 59 cents per share, in the period a year ago. The earnings were 3 cents better than analysts' average forecast of $1.08 a share.

Revenue rose 46 percent to $719 million, which again surpassed analysts expectations of $703.6 million, according to Thomson Reuters I/B/E/S.

To attract more customers, Netflix has built its streaming offerings through a rush of content agreements. Recent ones include a Lionsgate deal for Mad Men, a Fox deal for Glee, and a two-year deal with CBS that adds shows such as Cheers and Frasier.

Netflix made an aggressive move into securing its own content, purchasing the distribution rights for the original series House of Cards, starring Kevin Spacey. The company said on Monday that it planned two to three more similar but smaller deals.

Netflix shares fell to $238.20 following the earnings report, after closing at $251.67, down 55 cents, during the regular Nasdaq session. They have climbed almost 44 percent this year.

(Additional reporting by Liana Baker; Editing by Gary Hill)

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