Shares in Netflix (NFLX) were down more than 6% in pre-market trading on Wednesday, after the streaming giant posted earnings that missed expectations.
Netflix reported revenue of $11.51bn (£8.64bn) in the third quarter, which was just shy of Bloomberg consensus estimates of $11.52bn and slightly below the company’s own guidance of $11.53bn. However, this was up compared to $9.82bn in the same quarter last year.
Earnings of $5.87 per share also missed analyst expectations of $6.94 and Netflix’s internal forecast of $6.87, though this was still above the $5.40 reported a year ago.
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Netflix said that an operating margin of 28% was below its guidance of 31.5% due to an expense related to an ongoing dispute with Brazilian tax authorities that was not in its forecast.
However, guidance for the fourth quarter was slightly better than expected on Wall Street, with Netflix forecasting revenue of $11.96bn versus expectations of $11.9bn, as per a Bloomberg analyst poll. The company’s earnings per share guidance of $5.45 for the final three months of the year was also stronger than analyst estimates of $5.42.
Dan Coatsworth, head of markets at AJ Bell, said that the tax issue in Brazil “put a dampener on Netflix’s latest results” and ended its strong run of beating forecasts.
“Netflix implies the tax issue won’t be material going forward, so there is an element of treating this as a one-off setback,” he said. “Tax matters aside, the core business is in a happy place.”
Shares in Beyond Meat (BYND) surged a further 36% in pre-market trading on Wednesday, after soaring 146% in the previous session.
The jump in shares came after Beyond Meat announced plans to increase the availability of its products at over 2,000 Walmart (WMT) stores.
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The plant-based meat maker said that Walmart would be among the first national retailers in the US to sell its new Beyond Burger 6-Pack. Ethan Brown, founder and CEO of Beyond Meat, said that the company was introducing the new value pack “at a time when many households are navigating rising food prices”.
Beyond Meat shares rallied on Monday after Roundhill Investments, an investment adviser focused on exchange traded-funds (ETF), added the stock as a holding to its Meme Stock ETF. Beyond Meat was one of the new names to become part of latest cohort of meme stocks this year, with the craze seeing a resurgence in July.