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Netflix The video streamer missed earnings targets set by stock market analysts during its latest quarter, with the company blaming a tax dispute. brazil,
The results announced on Tuesday shattered Netflix’s six-quarter profit, which beat analysts’ estimates.
Los Gatos, Californiacited an unexpected $619 million expense related to a Brazilian tax dispute for the earnings decline, while praising its lineup of exclusive TV series and movies for keeping its audience engaged and providing a mix of subscriber fees and increased advertising sales that helped it deliver revenue that matched analyst forecasts.
However, investors were not satisfied with the explanation as Netflix shares fell about 5% in extended trading even after the figures were released.
Netflix earned $2.5 billion, or $5.87 per share, in the July-September quarter, up 8% from the same period last year. Revenue increased 17% from the previous year to $11.5 billion. Analysts polled by FactSet Research had predicted the Los Gatos, California-based company would earn $6.96 per share on revenue of $11.5 billion.
It has become more important than ever for Netflix to deliver solid financial growth as management has stopped letting investors judge how many subscribers its service gains from one quarter to the next. As part of that process, Netflix stopped disclosing its subscribers late last year.
The shift has paid off so far, with Netflix’s share price up nearly 40% so far this year, though a decline in extended trading suggested some of those gains may be about to evaporate.
Although Netflix no longer discloses specifics, this year’s revenue growth indicates that its number of subscribers worldwide has increased from about 302 million at the end of last year — by far the most among video streamers, even as deeper-pocketed rivals. Amazon And Apple Expand their programming selection.
Netflix has maintained its lead by adding more live sports and video games to complement its wide range of scripted programming — a diversification effort that will expand to video podcasts from Spotify next year.
And now Netflix may have another opportunity to add even more compelling programming with Warner Bros. Discovery has announced that it may sell all or part of its stake, which includes HBO, DC Studios, and CNN. Analysts are already speculating that Netflix could be among the bidders looking to grab a share of Warner Bros. Discovery.