Roku Inc ROKU shares are trading lower by 22.80% to $65.75 Friday morning after the company reported worse-than-expected second-quarter EPS and sales results. The company also issued third-quarter sales guidance below analyst estimates.
What Happened?
Roku reported quarterly losses of 82 cents per share which missed the analyst consensus estimate of a loss of 68 cents by 20.59 percent. Roku also reported quarterly sales of $764.41 million which missed the analyst consensus estimate of $805.64 million by 5%.
Traders and investors are also reacting to weak guidance from the company. Roku's third-quarter 2022 net revenue estimate of approximately $700 million came in markedly lower than the analyst consensus estimate of $901.73 million.
Why it Matters
"In Q2, there was a significant slowdown in TV advertising spend due to the macro-economic environment, which pressured our platform revenue growth. Consumers began to moderate discretionary spend, and advertisers significantly curtailed spend in the ad scatter market (TV ads bought during the quarter)", Roku said in a letter to shareholders.
"We expect these challenges to continue in the near term as economic concerns pressure markets worldwide. In response, we took steps in Q2 to significantly slow both operating expense and headcount growth. While our revenue and gross profit growth have slowed, we continue to win advertising share and grow active accounts. We remain confident in our industry leadership in TV streaming, the size of the opportunity in front of us, and our unique assets, including the Roku TV OS, The Roku Channel, and our ad platform," Roku stated.
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According to data from Benzinga Pro, Roku has a 52-week high of $490.76 and a 52-week low of $72.63.
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