Roku stock plunges after earnings beat, weak profit forecast
Roku Inc. shares dropped more than 10% in after-hours trading Wednesday despite a quarterly earnings report that topped expectations, as the company's profit projection for the holiday quarter came in light. Roku reported a loss of $9.5 million, or 9 cents a share, on sales of $173.4 million, up from a loss of $8.79 a share a year ago on revenue of $124.8 million. Analysts on average expected a loss of 12 cents a share on sales of $170.4 million, according to FactSet. For the holiday season, Roku projected sales in line with expectations, but forecast the bottom line in a range from a loss of $4 million to a profit of $3 million. Analysts on average were expecting fourth-quarter earnings of $7 million on average, according to FactSet; Roku reported net income of $6.9 million in the fourth quarter of 2017. Roku shares fell after the report was released in extended trading Wednesday. They closed with a 5.8% gain, receiving a boost late in the session after a CNBC report said Roku was talking with media companies about incorporating their offerings into Roku's streaming media channel, which Wednesday's letter to shareholders did not explicitly confirm. The stock is up 13.7% so far this year, as the S&P 500 index has gained 3.1%. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.