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Netflix stock drops 9.2% to $67.50 after disappointing forecasts
Netflix announced that it expects to achieve revenues of $12.86 billion and diluted earnings per share of 82 cents in the third quarter of the year, falling short of market expectations, which anticipated $13 billion in revenue and earnings of 84 cents per share. This caused its stock to drop by 8.6% after the forecast was issued. These figures reflect the beginning of a phase of stable growth for the company, which announced a reduction in the frequency of reporting viewing hours to once a year starting in 2027, in an effort to focus the market on key financial metrics and adopt a more cautious policy after ceasing to publish subscriber numbers since 2025. Meanwhile, Netflix continues to face fierce competition from entertainment and tech giants and is working on diversifying its sources of income by launching advertising services and developing gaming offerings, with expectations to increase advertising revenues to $3 billion this year. The results also indicate sustained strong financial performance, with viewing hours growing by 2% in the first half of the year, and an expansion in the use of artificial intelligence technologies in content production, as part of its efforts to maintain its position in the streaming entertainment market.
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