Despite surpassing analyst expectations for the quarter, Roku disappointed Wall Street when it shared its fourth-quarter earnings after the bell on Wednesday. The digital streaming business fell about 18% in after-hours trading, in the minutes following the news release.
Roku posted$188.3 million revenue, when Yahoo! Finance estimates showed $182.5 million. Earnings per share was 6 cents, much better than the negative 10 cents that Wall Street forecast.
So what’s spooking investors?
First of all, the earnings per share for the quarter wasn’t exactly comparable to the analyst expectations because of a $2.3 million debt charge.
There was also an issue with guidance. Roku said that next quarter it expects $120 million to $130 million in revenue, beneath the $131.7 million that experts were forecasting.
This is a big disappointment for Roku investors, for what otherwise has been a very solid run. Roku went public on the stock market last year and has since nearly quadrupled its share price.
The company went public at $14 per share and closed Wednesday at $51.10.
Roku has a market cap of $5 billion.
