Netflix grows, but a tax dispute in Brazil holds back quarterly results
The shares fell as much as 6% in Tuesday's after-hours trading. With Warner Bros Discovery up for sale, the company cold on mergers: 'They are not a must for us'.
Netflix grows again, busy defending its crown as streaming king, but remains dis-eight of Wall Street's expectations for third-quarter earnings, weighed down by unexpected expenses stemming from a dispute with Brazilian tax authorities.
Netflix shares fell 6 per cent before recovering slightly, down 4.8 per cent to $1,181, in after-hours trading on Tuesday. Since the start of the year, however, they are up about 40 per cent.
The spotlight of new and old media is now on possible new dramatic consolidations in the industry, with Warner Bros. Discovery putting itself up for sale, in whole or in part, spurred by the explicit interest in absorbing it expressed by Paramount and the Ellison empire. Netflix, in the face of the shocks, remains cautious, indeed officially cool, invoking above all internal growth. "Nothing is a must for us," said co-chief executive Ted Sarandos.
The top executive indicated that it is a "responsibility" to look at selective mergers if they bring value, but without any interest in traditional media (which would exclude bets on WBD as a whole). In the crosshairs, according to some observers, could be WBD's well-known streaming and production brand, namely Hbo Max. During the Q&A with analysts, Sarandos assisted by co-CEO Greg Peters added, however, that the priority is to respond to challenges such as the development of capabilities, technologies and production in dozens of countries or the integration of artificial intelligence; the answer to these challenges, he suggested, is not found in mergers per se.
The streaming leader, when it comes to performance, reported net profits of $2.5 billion, up 8%, and diluted earnings per share of $5.87 between July and September, on the strength of successful programming. The animated film 'K-Pop Demon Hunters' became the most-watched film in Netflix's history. Netflix also made inroads with live sporting events, such as the boxing match between Canelo Alvarez and Terence Crawford in September for the title in the super middleweight category. Analysts and the company itself, however, expected profits of $3 billion and $6.97 respectively.
