- Associated Press - Monday, April 23, 2012

SAN FRANCISCO (AP) - Netflix says it suffered its first quarterly loss in seven years as the video subscription service dealt with rising licensing fees and the bill for an international expansion.

The first-quarter setback announced Monday was far smaller than analysts expected.

In another encouraging sign, the company’s subscriber growth accelerated during the first three months of the year. That provided further evidence that Netflix Inc. is recovering from a U.S. customer backlash triggered by sharp price increases last summer.

Netflix also predicted that it would make money during the current quarter.

Investors, though, were dissatisfied with the report and forecast. Netflix shares plummeted $14.09, or nearly 14 percent, to $87.75 in extended trading after the results came out.

The company ended March with 26.5 million subscribers to its $8-per-month service that streams movies and TV shows over high-speed Internet connections. That was up from 23.5 million at the end of last year.

Another 10 million subscribers, including about 7 million streaming customers, also rent DVDs from Netflix through the mail _a service that the company is trying to phase out. Netflix has lost nearly 4 million DVD subscribers since September, including 1.2 million in the first quarter

Netflix Inc. lost $4.6 million, or 8 cents per share, during the first three months of the year. It’s the first time that Netflix has lost money during a three-month period since the first quarter of 2005.

At the same time last year, Netflix earned $60 million, or $1.11 per share.

First-quarter revenue climbed 21 percent from last year to $870 million.

Analysts surveyed by FactSet had predicted Netflix would lose 27 cents per share on revenue of $866 million.