Sign in Subscribe
Financial markets

Netflix Misses Earnings Target, Cites Brazilian Tax Dispute

Strategic Insights

— 1 min read

Netflix's latest quarter ended with the company falling short of earnings projections set by stock market analysts, the first time in six quarters it has failed to deliver on expectations. The Los Gatos, California-based video streamer earned $2.5 billion, or $5.87 per share, an 8% increase from the same time last year, but this was not enough to meet analysts' predictions. Netflix blamed an unexpected $619 million expense tied to a tax dispute in Brazil for the earnings shortfall. Despite the miss, the company's revenue of $11.5 billion matched analyst forecasts, and its share price has risen about 40% this year. However, investors were not pleased with the explanation, and Netflix's shares fell by about 6% in extended trading after the numbers came out.

Key Takeaways:

  • Netflix missed its earnings target for the first time in six quarters, citing a $619 million expense tied to a tax dispute in Brazil.
  • Despite the miss, the company's revenue of $11.5 billion matched analyst forecasts, and its share price has risen about 40% this year.
  • Netflix earned $2.5 billion, or $5.87 per share, in the July-September quarter, an 8% increase from the same time last year.
  • The company's revenue growth signals that its worldwide subscriber count has increased from the roughly 302 million it had at the end of last year.
  • Netflix's total worldwide audience, including multiple people living in the same subscriber household, is approaching 1 billion.
  • The company has maintained its lead by adding more live sports and video games to supplement its wide array of scripted programming.
  • Netflix may have another opportunity to add even more compelling programming with it potentially selling all or part of its holdings, including HBO, DC Studios, and CNN.

Statistics:

  • Netflix earned $2.5 billion in the July-September quarter.
  • The company's revenue climbed 17% from last year to $11.5 billion.
  • Analysts surveyed by FactSet Research predicted the company to earn $6.96 per share on revenue of $11.5 billion.
  • Netflix's share price has risen about 40% this year.
  • The company's total worldwide audience, including multiple people living in the same subscriber household, is approaching 1 billion.
  • A recent analyst by S & P forecast $1.1 billion in ad sales for Netflix this year.
  • The advertising business is expected to more than double from last year.

Sources:

  • Investing.com
  • FactSet Research
  • The Associated Press

Read more