"The Los Gatos, California, cited an unexpected $619 million expense tied to the Brazilian tax dispute for the earnings shortfall while hailing its lineup of distinctive TV series and films for keeping its audience engaged and delivering a mix of subscriber fees and increased ad sales that helped it deliver revenue that matched analyst forecasts. Investors, though, weren't placated by the explanation as Netflix's shares still fell by about 6% in extended trading after the numbers came out."
"Investing.com analyst Thomas Monteiro worries Netflix is using the Brazilian tax hit as a way to mask signs of a slowdown in subscriber growth and advertising amid economy uncertainty. "The truth is that the company failed to deliver the kind of growth we've grown used to over the past couple of years," he said. But Zacks analyst Jeremy Mullin said he sees little reason for concern, asserting Netflix's "underlying story remains solid.""
Netflix missed analysts' earnings target for the latest quarter after recording an unexpected $619 million expense tied to a Brazilian tax dispute. The miss ended a six-quarter streak of profits surpassing analysts' projections. Revenue matched forecasts at $11.5 billion, while net income rose 8% to $2.5 billion, or $5.87 per share, below the FactSet-predicted $6.96. Shares fell about 6% in extended trading. Analysts split on implications: some worry the tax charge masks slowing subscriber and ad growth amid economic uncertainty, while others view the company's underlying business as solid. Netflix has emphasized financial growth over quarterly subscriber disclosures.
Read at Fortune
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