Netflix Suffers $20 Billion Loss As Trump Wields 100% Movie Tariffs
Netflix's Spain headquarters. The streaming service had previously been hailed by Wall Street as a ... More 'predictable' stock amid Trump's unpredictable tariffs.
Netflix stock fell 4% to $1,113, tracking toward its worst daily loss since April 4.
The slide followed Trump's Sunday evening proclamation he'd slap a 100% tariff on 'any and all Movies coming into our Country that are produced in Foreign Lands,' declaring films produced outside the U.S. are a 'National Security threat.'
Also struggling were shares of Disney (-2%), Max parent Warner Bros. Discovery (-3%), Paramount Global (-2%) and Universal Pictures parent Comcast (-1%), all outpacing the less than 1% loss for the S&P 500 baseline stock index.
$20.4 billion. That's how much market capitalization Netflix lost Monday. That's almost exactly the same as Warner Bros. Discovery's $20.5 billion total valuation.
Unlike goods on which officials collect duties when entering U.S. ports, movies are services with a more complicated tariff structure. 'Is it just movies, or also streaming series? Is it visual effects, co-productions, international film financing? There's a huge degree of uncertainty,' Henning Molfenter, the former head of the German Babelsberg Studio with producer credits on 'The Pianist' and 'Captain America: Civil War,' told The Hollywood Reporter.
Just more than half, or 51%, of Netflix's 2024 content spending went to content from outside of North America, according to market research firm Ampere Analysis. About 70% of the streamers' paid subscriptions come from outside the U.S. and Canada. Some of Netflix's most popular recent programs among American audiences include shows filmed outside the U.S., including the British period series 'Bridgerton' and the South Korean 'Squid Game.'
Prior to Trump's Sunday announcement, Netflix stock was hailed by many as a relative safe haven compared to other stocks in the crosshairs of tariff choppiness. Bank of America analysts' note following Netflix's earnings report was titled 'Predictable in an unpredictable world.' Through Friday trading, Netflix stock returned 30% in 2025, far outperforming the returns of Facebook parent Meta (2%), Amazon (-13%), Apple (-18%) and Google parent Alphabet (-13%), the other members of the 'FAANG' grouping of high-growth technology stocks.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
38 minutes ago
- Yahoo
Essex Property Trust Inc (ESS) Q2 2025 Earnings Call Highlights: Strong Core FFO Performance ...
Core FFO Outperformance: $0.07 above guidance in Q2 2025. Blended Rate Growth: 3% for the same store portfolio in Q2 2025. Same-Property Revenue Growth: Increased midpoint by 15 basis points to 3.15% for the full year. Same-Property Expense Reduction: Midpoint reduced by 50 basis points to 3.25% due to lower property taxes. Same-Property NOI Growth: Expected to grow 3.1% at the midpoint, a 40 basis point improvement from original guidance. Core FFO Per Share Guidance: Increased by $0.10 to $15.91 for the full year. Q3 Core FFO Guidance: Forecasted at $3.94 at the midpoint. Net Debt to EBITDA: 5.5 times. Available Liquidity: $1.5 billion. Term Loan: $300 million issued, $150 million drawn at 4.1% fixed rate through April 2030. Line of Credit: Expanded to $1.5 billion, maturity extended to 2030. Warning! GuruFocus has detected 9 Warning Signs with ESS. Release Date: July 30, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Essex Property Trust Inc (NYSE:ESS) reported a $0.07 core FFO outperformance in the second quarter. The company increased its same property and core FFO guidance for the year. Suburban markets like San Mateo and San Jose showed strong performance with 5.6% and 4.4% blended rate growth, respectively. Essex Property Trust Inc (NYSE:ESS) has successfully invested in Northern California, achieving yields in the mid to high 4% range. The company has enhanced its balance sheet flexibility with a $300 million delayed draw term loan and expanded line of credit. Negative Points Los Angeles underperformed with only 1.3% blended rent growth due to elevated supply and delinquency challenges. Southern California, which constitutes 40% of the portfolio, has been a drag on overall performance. The company expects a sequential decline in core FFO for the third quarter due to elevated operating expenses. Essex Property Trust Inc (NYSE:ESS) is scaling back its mezzanine platform, which could lead to temporary headwinds in core FFO growth. The company anticipates a deceleration in blended rent growth in the second half of the year due to normal seasonality. Q & A Highlights Q: Can you elaborate on the weaker blended pricing in Los Angeles and any specific impacts like fire ordinances? A: Angela Kleiman, CEO, explained that Los Angeles underperformed due to heavier supply in the first half and slower delinquency recovery, not due to fire ordinances. The soft demand environment in Southern California, mirroring the US economy, also contributed. However, supply is expected to decline in the second half, which should be beneficial. Q: What is driving the strength in Northern California, and is it being fully appreciated? A: Angela Kleiman noted that Northern California is performing slightly better than expected, with job postings gradually increasing. The blended lease rates, when considering all leases, show a stronger performance than reported. The seasonal peak for rents has been reached, and normal deceleration is expected unless there's a significant macroeconomic improvement. Q: Why is Essex scaling back its mezzanine platform despite a successful track record? A: CFO Barbara Pak stated that the mezzanine book had grown too large, creating earnings volatility. The focus is shifting to stabilized multifamily assets for better cash flow and NAV growth. The structured finance book is expected to be less than 4% of core FFO, with a reduction in earnings headwind anticipated as investments are repaid. Q: How are concessions in Los Angeles affecting the market? A: Angela Kleiman mentioned that concessions in Los Angeles remain elevated compared to the rest of the portfolio, slightly higher than last year. However, they are not dramatically worsening or improving. Q: What are the capital allocation priorities for Essex, and how does the commercial paper program fit in? A: Rylan Burns, CIO, emphasized that fee simple acquisitions are a top priority due to current cost of capital and development risks. The commercial paper program offers a 70 basis point savings over the line of credit and will be used similarly as a temporary bridge to permanent financing. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data
Yahoo
38 minutes ago
- Yahoo
Western Digital Corp (WDC) Q4 2025 Earnings Call Highlights: Strong Revenue Growth and ...
Revenue: $2.6 billion, up 30% year-over-year. Non-GAAP Gross Margin: 41.3%, improved by 610 basis points year-over-year. Non-GAAP Earnings Per Share (EPS): $1.66, up 22% sequentially. Free Cash Flow: $675 million for the quarter. Debt Reduction: Lowered by $2.6 billion during the quarter. Operating Expenses: $345 million. Operating Income: $732 million, with an operating margin of 28.1%. Interest and Other Expenses: $52 million. Cash and Cash Equivalents: $2.1 billion at the end of the fiscal fourth quarter. Share Repurchase: $149 million worth of shares repurchased. Quarterly Cash Dividend: $0.10 per share, resulting in $36 million of dividend payments. Cloud Revenue: $2.3 billion, representing 90% of total revenue, up 36% year-over-year. Client Revenue: $140 million, representing 5% of total revenue, up 2% year-over-year. Consumer Revenue: $136 million, representing 5% of total revenue, down 12% year-over-year. Guidance for Q1 Fiscal 2026 Revenue: Expected to be $2.7 billion, plus or minus $100 million. Guidance for Q1 Fiscal 2026 Gross Margin: Expected between 41% and 42%. Guidance for Q1 Fiscal 2026 EPS: Expected to be $1.54, plus or minus $0.15. Warning! GuruFocus has detected 8 Warning Signs with WDC. Release Date: July 30, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Western Digital Corp (NASDAQ:WDC) reported strong financial results for the fourth quarter of fiscal 2025, with revenue of $2.6 billion, up 30% year-over-year. The company achieved a non-GAAP gross margin of 41.3%, reflecting a 610 basis point improvement year-over-year. Western Digital Corp (NASDAQ:WDC) successfully reduced its debt by $2.6 billion, strengthening its balance sheet and achieving a net leverage target range of 1x to 1.5x. The company initiated a quarterly cash dividend program and authorized a $2 billion share repurchase program, demonstrating a commitment to returning cash to shareholders. Demand for high-capacity drives, particularly the latest generation EPMR and UltraSMR drives, is strong, with shipments more than doubling quarter-over-quarter. Negative Points The broader market environment remains uncertain, particularly due to potential tariff impacts and geopolitical tensions. Operating expenses were slightly above guidance due to higher variable compensation, indicating potential challenges in cost management. The company faces risks related to the adoption of new technologies, such as HAMR, which require successful transition and qualification with customers. There is a potential for cyclical downturns in the business, as the company operates in a market that is subject to periods of digestion and fluctuating demand. The ASP per terabyte was down slightly, driven by mix, which could impact revenue growth if not offset by volume increases. Q & A Highlights Q: Can you explain the gross margin guidance for the September quarter and the factors influencing it? A: Kris Sennesael, CFO, explained that the gross margin guidance reflects a stable pricing environment, a favorable mix shift towards higher capacity drives, and effective cost control. The company is executing well on these fronts, and there is confidence in further gross margin improvements over time. Q: With strong free cash flow and reduced debt, how does Western Digital plan to approach share repurchase activity? A: Kris Sennesael, CFO, stated that the company is committed to returning cash to shareholders through dividends and share repurchases. The dividend program has room to grow, and there is no hesitation to execute the share repurchase program as cash flow generation continues to grow. Q: How does the current business structure affect seasonality, especially with 90% of revenue coming from cloud? A: Irving Tan, CEO, noted that traditional seasonality no longer applies as the business is driven by cloud CapEx spend and hyperscale customer programs. While the business is cyclical, the company has good visibility into customer plans, which helps manage potential cycles of digestion. Q: What is the adoption curve for UltraSMR among hyperscale customers, and are there workloads where it is less advantageous? A: Irving Tan, CEO, mentioned that UltraSMR adoption is growing, with a third hyperscale customer recently qualified and a fourth in process. While some legacy workloads use lower capacity drives, new workloads are adopting the highest capacity points available, typically on UltraSMR. Q: How does Western Digital balance capacity planning with customer demand and visibility? A: Irving Tan, CEO, explained that the company educates customers on long lead times and has moved to a 52-week lead time program. This partnership provides insight into growth requirements and helps accelerate aerial density improvements, ensuring the company can meet customer demand without incremental capacity investments. Q: How does the extra week in the fiscal quarter affect revenue and operating expenses? A: Kris Sennesael, CFO, stated that the extra week has minimal impact on revenue but adds approximately $15 million in operating expenses for the quarter. Future quarters will return to normal 13-week periods, reducing operating expenses accordingly. Q: How is agentic AI deployment expected to impact Western Digital's growth projections? A: Irving Tan, CEO, indicated that AI is driving an uplift in exabyte growth, potentially increasing it from the base 15% CAGR to 23%. This, combined with lower ASP declines, could shift revenue growth from mid- to high single digits to mid-teens, enhancing long-term growth prospects. Q: Can you provide an update on the aerial density roadmap leading to HAMR technology? A: Irving Tan, CEO, outlined that the current ePMR products are at 26-terabyte CMR and 32-terabyte UltraSMR. The next generation, qualifying in the first half of 2026, will be 28-terabyte CMR and 36-terabyte UltraSMR. HAMR qualification will start in the second half of 2027, with a ramp in early 2027, reaching 38-terabyte CMR and 44-terabyte UltraSMR. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
38 minutes ago
- Yahoo
BOJ Stands Pat, Lifts Price View in Sign of Progress Toward Hike
(Bloomberg) -- The Bank of Japan held its benchmark rate steady and raised its inflation views more than expected in a sign it may be closer to its next rate hike, while keeping options open by warning it's still assessing the impact of President Donald Trump's tariffs. The World's Data Center Capital Has Residents Surrounded An Abandoned Art-Deco Landmark in Buffalo Awaits Revival Budapest's Most Historic Site Gets a Controversial Rebuild San Francisco in Talks With Vanderbilt for Downtown Campus We Should All Be Biking Along the Beach The BOJ kept the overnight call rate at 0.5% at the end of a two-day policy meeting in a unanimous vote, according to a statement Thursday. All 56 surveyed economists forecast the decision. The nine-member board boosted its median inflation projection for the current fiscal year to 2.7% from 2.2% in its quarterly economic outlook report, reflecting persistent increases in food prices. It also slightly raised its forecasts for fiscal year 2026 and 2027, while bringing up its economic growth view a tad for this year. Economists had expected a shift to 2.5% for the current year's inflation forecast, and no change to other years. While the array of changes in the outlook suggested Governor Kazuo Ueda's board is closer to its next rate hike, the central bank also avoided dropping any clear hints as to the timing. Officials likely need time to gauge how US tariffs will affect Japan's economy and global commerce, even after a deal was struck between the US and Japan that's reduced some of the economic uncertainty hanging over Japan. Markets took the BOJ's decision in stride. The yen extended gains slightly against the dollar in the immediate aftermath of the decision and then oscillated in a relatively narrow range as Ueda spoke. Stocks closed higher, with little discernible impact from the decision. Japanese government bond futures swung from a small loss to a small gain. 'The BOJ's upward revision of its price outlook does make it seem like a rate hike is coming closer,' said Hiroki Shimazu, chief strategist at MCP Asset Management. 'At the same time, in the latest outlook report, the bank is also talking about an expected slowdown.' Those issues are key for markets, with the yen hovering near its weakest since early April and within easy reach of the psychological level of 150 to the dollar. Meanwhile, bond yields have been pushing higher in recent months, with the moves in longer-maturity debt spilling over into global markets. The BOJ gathering concluded just hours after the Federal Reserve kept its benchmark interest rate steady with Chair Jerome Powell, citing 'many, many uncertainties' impeding a move as Governors Christopher Waller and Michelle Bowman dissented by voting for a quarter-point cut. Powell tempered expectations for a rate cut in September. What Bloomberg Economics Says... 'The Bank of Japan's decision to stand pat Thursday was in line with our view that it's taking a cautious stance as it assesses the impact of US tariffs on exports. It likely also wanted to avoid making political waves with an increase in borrowing costs at a time when the government has been weakened further by a setback in the upper house election.' — Taro Kimura, economist Click here to read the full report The BOJ revised its assessment of the risk balance for inflation in its outlook report by saying risks were generally balanced. It only cited downside risks for fiscal years 2025 and 2026 in the report three months ago. That's another sign the board is looking at the potential case for higher rates down the road. The BOJ also softened its characterization of uncertainty over trade in the report summary to show it's no longer 'extremely' high, and reiterated its intention to raise rates if conditions allow. 'There have been positive developments in trade and other policies, such as negotiations between Japan and the United States resulting in an agreement,' the report said. Japan's government struck a trade deal with Washington on July 22 that will lower tariffs on US imports of Japanese autos and most other goods to 15%. Provided there's no change to the levies, BOJ officials expect they will have enough data by at least year-end to be able to consider whether a rate hike would be appropriate, people familiar with the matter told Bloomberg earlier this month. The BOJ's upgrade to the inflation outlook comes as persistently high living costs have made Japan among the most inflationary nations in the Group of Seven. Rising prices for food, especially rice, have driven the gains, compelling the bank to examine that impact on underlying inflation trends. Ueda has defended a gradual approach to rate hikes by noting that the price trend remains slightly below the bank's 2% target when measured through a comprehensive analysis. Persistently high living costs were a key concern for voters during this month's upper house election, which resulted in a historic setback for Prime Minister Shigeru Ishiba and his ruling coalition. The premier has so far vowed to stay in office even as some lawmakers within his Liberal Democratic Party have urged him to step down. Any political instability would complicate Ueda's job further as the bank would want to carefully communicate with the government after a history of clashes in past rate hike cycles. If the BOJ boosts rates once more, borrowing costs would rise to the highest level in three decades. 'If growth doesn't miss forecasts by much, I expect the BOJ to conduct an additional rate hike by year-end,' said Harumi Taguchi, principal economist at S&P Global Market Intelligence. 'The BOJ wants to assess how tariff impacts will affect Japanese corporate profits, as well as investment and wage hike trends, so I think they will make the move in December.' --With assistance from Brett Miller, Paul Jackson, Yoshiaki Nohara and Erica Yokoyama. (Updates with market moves as Ueda speaks.) Russia Builds a New Web Around Kremlin's Handpicked Super App Burning Man Is Burning Through Cash It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Everyone Loves to Hate Wind Power. Scotland Found a Way to Make It Pay Off Cage-Free Eggs Are Booming in the US, Despite Cost and Trump's Efforts ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
