Roku stock plunges 25% as TVs become hard to find

Roku reported quarterly revenue that missed estimates as the company was hit by supply chain issues that affected sales of TVs and its own streaming devices, sending shares tumbling 25% in the Friday afternoon talks.

The company, which has received a boost during the pandemic with people stuck at home, has recently seen demand for streaming services ease with restrictions put in place to prevent the spread of COVID-19.

Netflix last month forecast weak subscriber growth in the first quarter.

Roku said Thursday it expects revenue of $720 million for the current quarter, versus analyst estimates of $748.5 million, according to IBES data from Refinitiv.

Problems caused by global supply chain constraints, such as chip shortages and rising transportation costs, have affected the production of televisions, among other electronics, driving up the prices of end products such as the device. streaming from Roku.

The company said customer acquisition would remain a priority and would not pass on higher costs to customers. Roku’s gross margins fell about 3% in the quarter under review.

Delayed ad spending in verticals impacted by supply chain issues will continue into 2022, affecting how it monetizes content, Roku said.

Roku has been hit by supply chain issues that have affected sales of TVs and its own streaming devices.
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TV sales are expected to remain below pre-pandemic levels, affecting the rate at which it acquires active customers, the company said.

Roku reported fourth-quarter revenue of $865.3 million, versus estimates of $894.01 million.

The company’s shares were trading at $108.90 on the Nasdaq.

New York Post

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