• by Wayne Friedman , October 24, 2011

Even with its admitted marketing blunders, recent Netflix financial results appeared relatively unscathed -- but the stock market didn't respond well.

Third-quarter earnings almost doubled to $62.5 million from $38 million a year ago. Revenues climbed 48% to $821.8 for the period ending September 30. Net income did fall from sequential periods -- down from $68.2 million for the second quarter.

As result of the news, Netflix stock -- which was already hit with big declines in recent weeks -- took a big drop in after-hours trading on Monday. During NASDAQ trading hours, the stock closed up 1.5% to $118.84. But during after hours trading, the company could be found sinking a massive 27% to $86.33.

More detailed news showed that indeed, new subscriber business has significantly slowed. Netflix grew 18.9% in gross year-to-year subscriptions. But that number is drastically down from the 70% to 80% levels the company has been seeing in previous periods.

Netflix ended the quarter with 21.5 million U.S. streaming subscribers and 13.9 million U.S. DVD-mail order subscribers. In September, it forecast 21.8 million domestic streaming subscribers and 14.2 million U.S. DVD subscribers, down from a prior forecast.

Net subscribers were down 805,000 during the period. Netflix executives previously gave dire warnings about a decline in customers. In the previous periods, net subscribers were up 1.8 million in the second quarter of 2011, and 3.3 million in the first quarter 2011. Domestic churn of subscribers went up to 6.3% in the third quarter of 2011 from 3.8% in the same period a year ago.

Average revenue per subscriber is $11.96 -- a bit less than in previous quarters.

In summer, Netflix announced a plan to shift its still-large DVD-mail order business to a new brand named Quikster, while keeping its newer but smaller streaming video business under the Netflix name. Then in recent weeks -- after much consumer outcry -- it dropped the plan.

But Netflix didn't reverse its monthly consumer price -- effectively a 60% rise, pushing its combine DVD-mail order and streaming video business to $16 a month.

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