Netflix's (NFLX  ) subscriber growth came in higher than expectations for the second quarter at 10.9 million, but profits were weaker than analysts' expectations. Shares were 9% lower in post-market trading. The company's forecast for future growth was also less than expected.

Netflix added 10.9 million new customers in the quarter versus expectations of 7.5 million to bring its total to 192.2 million subscribers. It earned $1.59 per share which was less than expectations of $1.81 per share. Revenue was $6.15 billion which was slightly higher than the consensus of $6.08 billion. Most of the selling after-hours was due to the weak forecast as the numbers were quite strong on a year over year basis. In 2019's second quarter, the company posted a 159% increase in earnings and a 25% gain in sales.

The major disappointment was the company forecasting subscriber growth of 2.7 million users versus expectations of 5.2 million. Interestingly, the company has posted two, consecutive quarters of stronger than expected subscriber growth but has remained cautious about its outlook. In the last quarter, Netflix gained 15 million subscribers which overwhelmingly beat expectations of 8 million. At that time, the company projected subscriber growth of 7.5 million subs and a potential decrease in the third quarter. It beat the first figure and revised the second figure higher this quarter.

The company is interpreting its strong growth as pulling forward future, potential subscribers due to the pandemic. It also forecasts earnings per share for the next quarter to be $2.09 per share which was above analysts' expectations of $2.01. It expects third-quarter revenue to be $6.33 billion which was slightly below consensus of $6.4 billion.

Another piece of news from the report was the appointment of chief content officer, Ted Sarandos, to co-CEO. Current CEO Reed Hastings said that he plans to stay on and lead the company for another decade, but it does affirm the importance of good content as being critical for the company. One reason for its success during this period is that it's been one of the few sources of new content, but the company does expect some disruption to its production schedule starting in 2021.

Stock Price Impact

Even with Netflix's after-hours plunge, the stock's uptrend and recent breakout remain intact. The stock dropped 20% during the coronavirus crash but then quickly rebounded to new highs within a couple of weeks of the late-March market bottom.

From there, it was basically range-bound from mid-April to mid-June, until it gained 30% over the last month on above-average volume. As long as the stock stays above $440, its breakout is valid. Given the bullish market environment for tech stocks and it's continued growth, it's likely that dips will continue to be bought.