Stories
Netflix Shares Plunge 7% After Warning Of Slowing Revenue Growth
- •Netflix shares dropped 7% in extended trading following third-quarter results and a disappointing outlook for revenue growth.
- •Third-quarter revenue reached $12.87 billion, meeting analyst expectations, with earnings per share slightly beating projections at $0.87.
- •The company anticipates fourth-quarter revenue of $13.44 billion, marking what could be the fourth consecutive quarter of slowing growth.
- •Management blamed the sales shortfall on the advertising business, which is projected to fall $300 million short of previous expectations.
- •Netflix recently underwent major management changes, firing Chief Content Officer Bela Bajaria and film chief Dan Lin after laying off 6% of its workforce.
Key Questions Answered
Netflix shares dropped as much as 7% in extended trading because the streaming giant issued a disappointing revenue growth guidance and warned that its advertising business is likely to deliver $300 million less than anticipated, pointing to a fourth straight quarter of slowing revenue growth.
Netflix recently laid off 6% of its workforce, amounting to over 1,000 employees, and fired Chief Content Officer Bela Bajaria alongside film chief Dan Lin. Bajaria has since been replaced by Peter Rice, who previously served as Chairman of General Entertainment at Walt Disney Co. and 21st Century Fox.
For the third quarter, Netflix reported revenue of $12.87 billion, meeting analysts' projections exactly, while its Earnings Per Share came in at $0.87, which was marginally higher than the expected $0.82.
