- Associated Press - Tuesday, October 23, 2012

LOS GATOS, CALIF. (AP) - Netflix will update investors on the growth of its Internet video service Tuesday when the company releases its third-quarter earnings report.

The results, due out after the stock market closes, cover Netflix’s performance from July through September. That’s when it’s usually more difficult for Netflix Inc. to attract and retain subscribers because of summer vacations and longer daylight hours.

Netflix began the third quarter hoping to pick up between 1 million and 1.8 million U.S. subscribers to its $8-per-month service that streams movies and old TV series to devices with high-speed Internet connections.

If the subscriber gains fall on the lower end of that target, Netflix will likely have to revise its ambitions for the full year. Netflix set a goal in add 7 million streaming subscribers in the U.S. this year. A change would probably trigger another sell-off in Netflix’s stock, which has fallen by 78 percent from its peak price in the past 15 month. The shares closed Monday at $67.88.

Netflix needs steady growth in its U.S. business to help finance an international expansion. The video- streaming service debuted in Denmark, Finland, Sweden and Norway last week. Netflix also sells streaming subscriptions in Canada, the United Kingdom, Ireland and dozens of Latin American countries.

The push outside the U.S. resulted in a rare first-quarter loss earlier this year and depressed second-quarter earnings.

Analysts polled by FactSet expect Netflix’s third-quarter earnings to plunge more than 90 percent from last year to 5 cents per share. Third-quarter revenue is forecast to climb 9 percent to $905 million, based on analyst projections.

The big question hovering over Netflix now is whether the video licensing and marketing expenses piling up outside the U.S. will saddle the company with another loss in the fourth quarter and lead to its first annual loss in a decade.

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