Third Quarter Earnings Season Starts
Netflix reported third quarter earnings on Wednesday and despite figures matching or exceeding the company’s and Wall Street’s forecasts, shares took a tumble after hours, apparently due to dissatisfaction over the number of new subscribers gained over the past three months. Netflix shares dropped 26 percent to $331.41 per share after reporting 96 cents per share earnings and revenue of $1.41 billion. Pricing fluctuated during the day and ended down 0.12 percent at the conclusion of trading. It has been speculated that Netflix investors may be reacting negatively to the announcement from Time Warner’s HBO that it plans to provide a stand-alone streaming service next year. When making the announcement chief executive of HBO, Richard Plepler, noted that up to 10 million homes in the United States subscribe to broadband streaming video services and don’t have cable subscriptions, and as such they have no access to HBO. He went on to say that this presents a “large opportunity that should not be untapped”. In its quarterly letter, Netflix conceded that HBO is their primary competitor, going on to say that the competition will drive both companies to be better.
*JP Morgan is one of six of the world’s largest banks expected to admit to flaws in their global forex trading business, the others being Citigroup, UBS, Royal Bank of Scotland, HSBC and Barclays, for which they are likely to be liable for hefty penalties.