Why NetFlix is issuing new third quarter revenue projections
As the result of settling a class action suit out of court, Netflix Inc. is revising its third-quarter financial projections. For the third quarter, Netflix is projecting revenues of $173.5 million to $175.5 million, compared to an earlier estimate of $172.2 million to $176.5 million.
Netflix, No. 18 in the Internet Retailer Top 400 Guide to Retail Web Sites, is also revising its outlook for net income to $2.5 million to $5.3 million, down from a previous range of $4.5 million to $8 million. The new guidance include the out-of-court settlement.
The company is revising its third-quarter guidance due to an out-of-court settlement over a class action suit which will cost between $3 million and $4 million, Netflix says. "Our business continues to perform exceptionally well, with rapid subscriber growth and operating efficiencies enabled by market leadership," says Netflix co-founder and CEO Reed Hastings.
The suit claimed that Netflix made false and misleading statements and omissions of material facts based on delivery speed and other factors.
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