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Netflix shares fall as revenue appears to stall / Photo: MARIO TAMA - GETTY IMAGES NORTH AMERICA/AFP
NYSE - LSE
Netflix shares fall as revenue appears to stall
Netflix shares fell more than five percent on Tuesday as the streaming entertainment giant said it expected revenue to be essentially flat in the current quarter after years of growth.
Netflix posted profit of $2.4 billion on revenue of $12 billion in the final three months of last year, and forecast taking in $12.1 billion in revenue this quarter.
Shares were down slightly more than 5 percent to $82.85 in after-market trades.
The earnings report came as Netflix presses a bid to buy television and film titan Warner Brothers Discovery (WBD).
Netflix on Tuesday revised the terms of the proffered deal to make it all-cash and to provide WBD shareholders more certainty about the transaction, the company said in a release.
The revision is expected to enable a shareholder vote on the deal, backed by WBD's board, by April of this year.
"The WBD board continues to support and unanimously recommend our transaction, and we are confident that it will deliver the best outcome for stockholders, consumers, creators and the broader entertainment community," Netflix co-chief executive Ted Sarandos said in the release.
"The acquisition will also significantly expand US production capacity and investment in original programming, driving job creation and long-term industry growth."
Paramount Skydance said earlier this month that it has filed a lawsuit against WBD as it presses an unwelcome bid to buy the CNN-parent company.
Paramount's suit seeks to compel the WBD board to provide certain information to shareholders that it argues will cast its offer in a more favorable light.
The suit, and a letter to WBD shareholders by Paramount Skydance chief executive David Ellison, are moves in a saga spanning several months.
Television and film titan WBD put out word in late October that it was open to acquisition offers, with its board subsequently accepting a bid by streaming giant Netflix.
WBD formally rejected an offer from Paramount Skydance for the entire company.
The Netflix offer favored by the board does not include buying WBD television properties such as CNN and Discovery, which would belong to a newly created and publicly traded company called Global Networks if the deal is sealed.
"We are committed to seeing our tender offer through," Ellison said in the letter to WBD shareholders.
"If WBD calls a special meeting ahead of its annual meeting to vote on the Netflix Agreement, Paramount will solicit proxies against such approval."
Z.Garcia--PS
