(Reuters) - Netflix Inc’s subscriber growth fell short of Wall Street expectations on Monday, sending shares of the normally high-flying stock down 14 percent on fears that the company’s rapid expansion is slowing. 
 
 The streaming video pioneer added 5.2 million customers from April through June, 1 million fewer than forecasts from Thomson Reuters I/B/E/S, as it added new programming including “Lost in Space” and new episodes of Marvel’s “Jessica Jones” and “13 Reasons Why.” 
 
 “We had a strong but not stellar Q2,” Netflix said in a quarterly letter to shareholders. 
 
 Netflix said it had “over-forecasted” quarterly fluctuations in the pace of new customers. The company noted that it had underestimated subscribers for seven of the past 10 quarters. 
 
 Before the earnings report, Netflix shares had gained 109 percent, making it the second-strongest performer on the S&P 500 index. In after-hours trading on Monday, Netflix shares sunk 14 percent to $343.60, eroding $24.2 billion in market capitalization and down from an earlier close of $400.48. 
 
 “Investors are devastated by Netflix’s Q2 projection that went down in dramatic flames. Now future projections are suspect and that decimates valuation,” said Eric Schiffer, chief executive officer of private equity firm Patriarch. 
 
 Wall Street had been betting that Netflix would deliver outsized growth as demand for online entertainment increases around the globe. The company is spending heavily to hook new customers, budgeting $8 billion for programming and $2 billion for marketing in 2018. 
 
 Netflix added 670,000 subscribers in the United States, well below analysts’ estimates of 1.19 million, according to Thomson Reuters I/B/E/S. 
 
 It signed up 4.47 million subscribers internationally, while analysts were expecting 4.97 million. 
 
 The overly optimistic projections were “pretty broad across multiple markets,” Chief Financial Officer David Wells said on a post-earnings webcast. 
 
 Executives voiced confidence about the long-term health of the streaming service. Chief Executive Reed Hastings said median viewing hours were growing, though he did not provide specifics. 
 
 The Netflix logo is seen on their office in Hollywood, Los Angeles, California, U.S. July 16, 2018. REUTERS/Lucy Nicholson 
 
 “The fundamentals have never been stronger,” Hastings said. 
 
 Forrester analyst James McQuivey said he believed that the quarterly results were “not a sign of softening in the business overall.” 
 
 “These are still millions of new subscribers, even if they didn’t meet the expectations that might have been set by the last two quarters, which were extraordinarily high,” he said. 
 
 Earnings per share came in at 85 cents, beating analyst forecasts of 79 cents. Total revenue rose 40.2 percent to $3.91 billion. Analysts had expected revenue of $3.94 billion. 
 
 For the current quarter, Netflix projected it would add 5 million customers. It is making a big push in India. Earlier this month, it debuted its first Indian original series, “Sacred Games,” part of a slate of new shows aimed at the vast Bollywood entertainment market. 
 
 Netflix said operating margins would be narrower than previously expected because of the rapid strengthening of the U.S. dollar, which appreciated by more than 5 percent against major trading partners’ currencies in the second quarter. While most of the company’s revenue growth comes from international markets, the vast majority of its costs remain dollar-denominated. 
 
 Hastings said the company would make adjustments to account for foreign exchange rates in order to “steadily” increase operating margins. 
 
 At the same time, Netflix faces growing competition. 
 
 Amazon.com Inc plans to add more regional content in India as it builds the Prime video service around the world. Apple Inc is pouring money into original programming, signing up A-list names including Oprah Winfrey. And AT&T Inc has promised to boost investment in HBO after taking over the network in its Time Warner acquisition. 
 
 Meanwhile, cable distributors are offering smaller and cheaper bundles of channels. 
 
 In the letter to shareholders, Netflix said it expected more competition from international players including ProSiebenSat 1 Media in Germany and on-demand service Salto in France. 
 
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 “Our strategy is to simply keep improving,” Netflix said. 
 
 (GRAPHIC: Netflix subscriber additions - tmsnrt.rs/2Nm9YsK) ||||| LOS ANGELES/NEW YORK (Reuters) - Netflix Inc, facing a backlash from customers upset over a price hike, warned its subscriber growth would cool down in the third quarter, and its shares fell 10 percent. 
 
 The movie rental company, whose stock is up 850 percent since early 2009, set off alarm bells on Monday when it said customer defections would take a bite out of its subscriber count. 
 
 Netflix will essentially end the third quarter with the same number, or only slightly more, subscribers as it had at the end of the second quarter. For investors accustomed to spectacular growth, the forecast represented a bitter pill and made clear that customers are sufficiently upset over a recent change to cancel the service. 
 
 Those cancellations will largely offset any new subscriber additions in the third quarter, and pressure financial results. Netflix forecast earnings and revenue for the third quarter that would come up short of current analyst estimates. 
 
 And that is on top of a second quarter revenue figure that looked light to analysts. 
 
 Netflix "came into the quarter as Superman and it looks like they ran into a little bit of kryptonite and lost some of their super power," said Barton Crockett, an analyst with Lazard Capital Markets. 
 
 The company forecast third-quarter revenue of between $780 million to $805 million in the United States compared with an average analyst estimate of $846.5 million, according to Thomson Reuters I/B/E/S. It is expecting global earnings of 72 cents a share to $1.07 a share, which is also below the current analyst estimate of $1.09 a share. 
 
 Netflix shares fell about 10 percent to $253 after closing at $281.53 in the regular session on Nasdaq, wrongfooting options traders who were betting that the stock would keep chugging higher, and bringing some welcome relief to short sellers. 
 
 "It's too early to call on Netflix's future at this point. I have a 'sell' rating on the company based on its high valuation, but I'm not shorting it because it's still a great company," said Brett Harriss, analyst at Gabelli & Co. "There's just not enough margin of safety to buy it here." 
 
 NO FLAWS ALLOWED 
 
 Previously, Netflix wowed Wall Street with big subscriber additions quarter after quarter, and investors piled in. The company trades at 61 times this year's earnings estimates, a valuation that brings high investor expectations. 
 
 While "the business is still healthy," the company's results must be "flawless to support a stock" at those levels, analyst Crockett said. 
 
 Netflix sparked a backlash earlier this month when it announced it was raising prices as much as 60 percent for plans that provide DVD rentals and online streaming of movies and television shows. Thousands of subscribers complained on the Netflix blog and Facebook page with many threatening to cancel their subscriptions. 
 
 In a letter to shareholders, Netflix said: "We hate making our subscribers upset with us, but we feel like we provide a fantastic service and we're working hard to further improve the quality and range of our streaming content." 
 
 By the end of the third quarter, it estimates it will have about 25 million total U.S. subscribers. That is barely more than the 24.59 million it now has. 
 
 The company said it expected customer growth to return in the fourth quarter. With the full impact of the price hike, the fourth quarter also could be "our first billion dollar global revenue quarter, driven by strong U.S. performance," the company said. 
 
 For the second quarter, the company's revenue rose 52 percent to $788.6 million, but fell short of the average analyst estimate of $791.5 million, according to Thomson Reuters I/B/E/S. 
 
 Second-quarter earnings surpassed expectations in rising to $68 million, or $1.26 a share, from $44 million, or 80 cents a share, in the period a year ago. 
 
 (Additional reporting by Yinka Adegoke and Jennifer Saba in New York; Editing by Gary Hill and Carol Bishopric)
– Netflix's share price, which had more than doubled since the start of the year, tumbled Monday after the company admitted that subscriber growth is beginning to slow down. In a letter to shareholders, the company said subscriber growth between April and June had been 5.2 million—1 million below its prediction, CBS News reports. The company said it had "over-forecasted" subscriber numbers in the "strong but not stellar" quarter, reports Reuters. Shares dived nearly 14% in after-hours trading following the letter, wiping around $25 billion from the company's market valuation. (The company's top spokesman was fired last month for his "insensitive" use of a racial slur when discussing comedy.)