Walmart halts H-1B visa offers amid Trump’s $100,000 fee increase - Bloomberg
Investing.com - Shares of Netflix Inc fell more than 7% in premarket U.S. trading on Wednesday after the streaming giant reported quarterly earnings below Wall Street expectations, due largely to a charge tied to a tax dispute in Brazil. , though the company said the matter will not have a material effect on future results.
Third-quarter profit per share came in at $5.87, missing analysts’ estimates of $6.96, while revenue rose 17% from a year earlier to $11.51 billion -- roughly in line with expectations. Netflix said revenue growth was driven by higher membership, pricing, and advertising income, with ad sales reaching their best quarter yet.
Meanwhile, U.S. and U.K. engagement hit record levels, up 15% and 22% respectively from late 2022, Netflix said, citing data from Nielsen and Barb. The firm has stopped providing subscriber numbers in earnings report.
But operating margin fell to 28% from 30% a year ago, weighed down by a $619 million expense linked to Brazilian non-income tax assessments covering a period from 2022 to the third quarter of this year.
Netflix said it would have exceeded its margin target without the charge. The Brazilian issue is also seen hitting full-year margins, with Netflix slashing its annual guidance for the figure to 29% from 30%.
In the current quarter, the number is anticipated to stand at 23.9%, up two points from a year earlier.
Meanwhile, the company projected that fourth-quarter revenue would come in at $11.96 billion and earnings of $5.45 per share.
Writing in a note, analysts at BofA Securities including Jessica Reif Ehrlich and Brent Navon flagged that Netflix did not provide an outlook for the upcoming fiscal year, unlike in the third quarter of 2024 -- a shift which the business attributed to the unique circumstances of removing subscriber disclosure beginning in 2025.
"However, this does not appear to signal any noticeable change in underlying fundamentals as advertising is expected to more than double in 2025, engagement growth picked up in the third quarter and the pricing environment is constructive on the heels of several price increases from competitors," the BofA analysts said.
(Pratyush Thakur contributed reporting.)