Netflix co-CEO Sarandos says 'we could do better' after weak forecast
LOS ANGELES: Netflix issued weaker-than-expected guidance for fourth-quarter profit and cut its full-year advertising forecast on Tuesday, days after the streaming pioneer laid off 6% of its workforce and replaced two of its top programming executives. Shares of Netflix fell nearly 6% to $64.66 in after-hours trading. The stock had fallen more than 40% in a year before the earnings report. Co-CEO…
On Tuesday, Netflix announced weaker-than-expected guidance for its fourth-quarter profit and lowered its full-year advertising forecast. The streaming giant also reported a decline in third-quarter revenue growth, raising questions about its ability to kick-start growth. Co-CEO Ted Sarandos stated that the company plans to refocus on producing quality TV shows and movies, following recent executive changes.
Shares of Netflix dropped nearly 6% to $64.66 in after-hours trading, following a 40% decline in the previous year. Despite third-quarter revenue rising 11.8% to $12.87 billion, slightly below Wall Street forecasts, the company cut its fourth-quarter net income estimate to $2.79 billion and EPS to 67 cents. The reduced advertising forecast for 2026 stands at roughly $2.7 billion, down from $3 billion.
Analysts have criticized Netflix for focusing on too many distractions and suggested the company should return to its core content strategy. Netflix has been competing with a surge in viewership on platforms like YouTube and TikTok. In response to the earnings report, the company laid off 1,000 employees (about 6% of its workforce) and replaced two top executives.
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