Netflix profit beats forecasts but ad sales worries weigh on shares

Summarised from 2 outlets · Updated 20 Oct, 22:02 · Archive

Netflix reported third-quarter profit above expectations but lowered its advertising revenue guidance, causing investor concern.

Netflix posted third-quarter profit of $3.66 billion, or 87 cents per share, for the July-September period, exceeding analyst expectations of 82 cents per share on revenue of $12.87 billion. Earnings rose 44% from the same period a year earlier, while revenue increased 12%.

Despite the stronger-than-expected results, investors sent Netflix shares lower after the company reduced its advertising revenue guidance. Emarketer senior analyst Ross Benes said the lowered ad estimates were concerning given Netflix's need to find revenue sources beyond subscriptions. He noted that the company's revised guidance was less aggressive than investors had anticipated.

Last week, Netflix announced it would lay off about 6% of its workforce, amounting to nearly 1,000 positions out of approximately 16,000 full-time employees worldwide, as part of organisational changes. The company also announced that Chief Content Officer Bela Bajaria would be replaced by Peter Rice, effective 26 October, to lead Netflix's global content operations.

Netflix faces intense competition from streaming rivals including Amazon Prime Video and Disney+, though the company has benefited from membership signups and price increases.

How it is being reported

• Netflix posts higher Q3 profit but revenue growth worries pull shares lowerNetflix, which announced layoff plans last week, posted a third-quarter profit above Wall Street’s expectations.News4Jax · 20 Oct, 21:37
• Netflix posts higher Q3 profit but revenue growth worries pull shares lowerNetflix, which announced layoff plans last week, posted a third-quarter profit above Wall Street’s expectations.Clickorlando · 20 Oct, 21:37

In this story: Netflix · Amazon Prime Video · Disney+ · Peter Rice · Bela Bajaria · Los Gatos

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