Shares of Netflix (NFLX) are down 7% after the streaming giant reported third-quarter earnings that missed Wall Street’s target.
Netflix posted earnings per share (EPS) of $5.87 U.S., which was well below the $6.97 U.S. expected among analysts.
Revenue of $11.51 billion U.S. matched the consensus expectation on Wall Street. Sales were up 17% from a year earlier.
Management blamed an ongoing dispute with Brazilian tax authorities for the weaker-than-estimated profit number.
The company decided to charge the tax hit to its third quarter financial results after it became likely that it would lose a legal challenge over whether it would have to pay the Brazilian tax.
Looking ahead, Netflix said that it expects revenue to rise 17% year-over-year in the current fourth quarter of the year.
For the full-year, Netflix is forecasting $45.1 billion U.S. in revenue, a 16% increase from a year ago and in line with previous expectations of 15% to 16% sales growth.
Despite the missed Q3 earnings, Netflix said it posted its best advertising sales quarter ever during the July through September period.
The company’s fourth-quarter slate of content contains popular titles, from the final season of “Strangers Things” and a new season of “The Diplomat” to a new “Frankenstein” movie.
Netflix also announced that it is entering the toy market with new partnerships it has struck with Hasbro (HAS) and Mattel (MAT).
Netflix will license characters from its popular animated movie “KPop Demon Hunters” to
Hasbro and Mattel so that they can create toys and games based on the film.
Prior to today (Oct. 22), NFLX stock had risen 40% this year to trade at $1,241.35 U.S. per share.
Tech Insider
