After winning back investors over the past year by convincing them that it had put its troubles behind it, Netflix (NFLX) on Monday issued an earnings report that gave them reasons to doubt again.

Despite a well-hyped exclusive new season of "Arrested Development" to lure customers, the Los Gatos company has added many fewer subscribers than it had in its most recent periods. And it warned of potentially disappointing earnings in its current third quarter.

The headquarters of Netflix is shown in Los Gatos, California in this September 20, 2011, file photo.   REUTERS/Robert Galbraith/Files
The headquarters of Netflix is shown in Los Gatos, California in this September 20, 2011, file photo. REUTERS/Robert Galbraith/Files (ROBERT GALBRAITH)

Subscriber growth was near the middle of a range Netflix forecast in April. But considering the company is now worth 187 times its expected earnings for this year -- a valuation that implies investors expect Netflix to grow rapidly -- that just wasn't good enough, said Michael Pachter, a financial analyst who covers the company for Wedbush Securities.

Netflix's "stock is priced for perfect execution," he said. "Any number that comes in below the high end of their guidance is less-than-perfect execution."

In the second quarter, the Internet video company earned $29.5 million, or 49 cents a share. That was up from $6.2 million, or 11 cents a share, in the same period a year ago, when it was still dealing with the fallout of a ham-handed price hike and absorbing the costs of an international expansion.

Sales rose 20 percent from the second quarter of 2012 to $1.07 billion. Financial analysts who cover the company had predicted that Netflix would earn 40 cents a share in the quarter on sales of $1.07 billion.

Netflix added some 630,000 U.S. subscribers in the period. That was well within the range of the company's forecast and above the 530,000 subscribers it added last year. But it marked a significant slowdown from the previous two quarters, when Netflix added more than 2 million new subscribers per quarter. Worse, it was below the expectations of many of those who cover the company.

During the second quarter, Netflix started streaming new episodes of "Arrested Development," a cult hit TV show that went off the air seven years ago. Some analysts expected the newly revived show to attract scads of new subscribers. Pachter, for example, predicted that Netflix would add as many as 1.3 million new subscribers in the second quarter, with "Arrested Development" by itself accounting for 500,000 of the new members.

In a letter to shareholders, company executives said "Arrested Development" accounted for a "small but noticeable bump" in subscriptions. And in a discussion of the earnings, Netflix executives said that investments in shows such as "Arrested Development" for which the company has some exclusive rights, will benefit the company over the long term.

During the quarter, Netflix's broad licensing deal with Viacom expired and it lost access to a host of children's shows, including "SpongeBob SquarePants" and "Dora the Explorer." The loss of that deal follows the loss of content from Starz last year. Netflix officials have said that they are trying to emphasize quality programming and exclusive content over broad content deals.

Netflix has been able to save money by being more choosy about its content deals, but that's likely a short-term strategy, said Michael Corty, an analyst who covers the company for Morningstar.

"In order to grow their business, they're going to have to invest in more content," he said.

For its current, third quarter, Netflix forecast earnings of between $18 million to $34 million, or 30 cents a share to 56 cents a share. The midpoint of that guidance -- 43 cents a share -- is below Wall Street's previous expectations. Before the report, Wall Street had forecast that Netflix would earn 45 cents a share in the third quarter on $1.1 billion in sales.

In late after-hours trading, Netflix's shares were off $10.90, or about 4 percent, to $251.06. Earlier in the session, they were down more than $20 a share. They closed regular trading off $2.62, or about 1 percent, to $261.96

In an unusual move, Netflix streamed a live video discussion of its earnings rather than holding a traditional conference call. CNBC reporter Julia Boorstin and BTIG Research analyst Rich Greenfield posed questions to Netflix CEO Reed Hastings and other executives that had been submitted by investors, analysts and members of the press.

Last week, Yahoo (YHOO) streamed video of its earnings call, but its executives followed a more traditional format, responding to questions from analysts.

Contact Troy Wolverton at 408-840-4285. Follow him at Twitter.com/troywolv.