Netflix shares fall as revenue appears to stall

Netflix shares fell more than 5% on Tuesday as the streaming entertainment giant said it expected revenue to be essentially flat in the current quarter after years of growth.

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Netflix posted profit of $2.4 billion on revenue of $12 billion in the final three months of last year, and forecast taking in $12.1 billion in revenue this quarter.

Shares were down more than 4% to $83.07 in aftermarket trades.

Netflix is focused on improving its core business by increasing the variety and quality of shows and films and also strengthening its ad business, co-chief executive Ted Sarandos said during a streamed earnings interview.

The streaming giant aims to double revenue from its ad business to $3 billion this year, according to Netflix chief financial officer Spencer Neumann.

"The top line numbers generally look pretty healthy," Gabelli Funds portfolio manager John Belton said of Netflix earnings report, noting that an updated subscriber number topping 325 million showed solid membership growth last year.