Roku forecasts surprise loss for holiday quarter, shares fall
Reuters
Published Nov 07, 2018 06:34PM ET
Roku forecasts surprise loss for holiday quarter, shares fall
By Kenneth Li and Munsif Vengattil
(Reuters) - Roku Inc forecast a surprise holiday-quarter loss and missed third-quarter revenue estimates for its high margin video streaming platform, sending its shares down nearly 13 percent in after-market trading on Wednesday.
The outlook overshadowed third-quarter revenue, which beat analysts' estimates, and a loss that was smaller than expected.
Revenue from Roku's streaming platform is a closely watched metric and the company has pinned hopes on the segment, which generates profit margins well above 70 percent.
Roku reported revenue of $100.1 million from the streaming platform unit, missing estimates of $103.2 million, according to FactSet data.
DA Davidson analyst Tom Forte said the pullback in shares was also a reflection of expectations being "too high" for the company's third-quarter results.
STRATEGY CHANGE
Roku's streaming devices have been facing intense competition from the likes of Apple (NASDAQ:AAPL) TV and Google (NASDAQ:GOOGL) Chromecast.
This led the company to tap other revenue sources, including licensing its technology to television makers and earning a share of the advertising revenue from media companies on its platform.
The company is investing more on content for its recently launched Roku channel and is expanding it to more geographies, Chief Executive Officer Anthony Wood told Reuters.
"We added several news providers in anticipation of the mid-term elections and it was one of our best news days ever."
Net loss attributable to shareholders narrowed to $9.5 million, or 9 cents per share, in the third quarter ended Sept. 30, from $46.2 million, or $8.79 per share, a year earlier. (https://
On an adjusted basis, the company lost 9 cents per share. Revenue rose 39 percent to $173.4 million.
Analysts on average had expected a loss of 12 cents per share on revenue of $169.1 million, according to IBES data from Refinitiv.
The company's shares were down 12.6 percent at $51.41 after the bell.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.