Episode summary
BI Weekend: Netflix, Tesla, AT&T Earnings | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Scarlet Fu · Guests: Geetha Ranganathan, Andrea Felsted, Steve Man, John Butler, Lindsay Dutch, Jody Lurie, George Ferguson
Summary
Netflix’s third quarter was weaker than expected because of a one-time Brazilian tax dispute, which the guest said depressed margins but did not change the company’s underlying strength. The host and guest also focused on Netflix’s unusually open posture toward M&A, especially studio assets, with Warner Bros. Discovery discussed as a possible target. The guest argued that AI could actually help Netflix by lowering content costs and that the company still has a robust pipeline for 2026.
The episode then turned to Kering’s $4.7 billion sale of its beauty division to L’Oréal, which Andrea Felsted framed as a balance-sheet move more than a strategic partnership. She said Kering’s new CEO is prioritizing cash, Gucci’s turnaround, and debt reduction over building beauty, even as the group tries to revive Gucci’s relevance with a more fashion-forward direction.
Tesla’s earnings miss, AT&T’s promotional battle, and Mattel’s delayed holiday orders all pointed to a tougher consumer and policy backdrop. The guests said Tesla’s costs were pressured by tariffs and higher R&D, AT&T is sacrificing pricing to win subscribers while leaning on fiber broadband, and Mattel is absorbing tariff costs while retailers order cautiously. Hilton and the aerospace names were brighter spots, with GE Aerospace and RTX benefiting from strong maintenance demand, backlog growth, and raised outlooks.
Key takeaways
- The Netflix guest said the Brazil tax charge hurt margins, but stripped out it would have been near a record operating margin.
- The host and guest said Netflix left the door open to buying studio assets, but not cable networks, and that AI could cut content costs by 5% to 10%.
- Andrea Felsted said Kering’s €4 billion beauty sale to L’Oréal is really about debt relief and giving Gucci more time to recover.
- Steve Man said Tesla’s quarter was hurt by tariff costs, higher R&D, and weaker-than-expected fixed-cost absorption despite record EV sales.
- John Butler said AT&T is using heavy promotions to grow subscribers while betting on fiber broadband as its future growth engine.
- George Ferguson said GE Aerospace and RTX are benefiting from high-margin maintenance demand and still-strong defense and aerospace backlogs.
Notable quotes
“Nobody saw this coming in terms of this transaction tax. Uh it's a little bit of a catch-up charge”
“we think that it should help Netflix actually curb content cost by about 5 to 10%”
“they're selling it for €4 billion uh in cash. That gets some money in to deal with the debt”
“It was quite a surprise given the volume of production. Uh you would think that uh you know the fixed cost absorption would be higher”
How the episode opens
Bloomberg Audio Studios podcasts, radio news. This is Bloomberg Intelligence with Scarlett Fu and Paul Sweeney. How do you think the Fed is looking at tariffs, the uncertainty of tariffs?
Let's take a look at the sectors and how they perform. A lot of investors getting whipsawed every day by news events, breaking market headlines and corporate news from across the globe. Could we see a market disruption, a market event?
Are people just too exuberant out there? You see some so-called lowquality stocks driving this short-term rally. Bloomberg Intelligence with Scarlet Fu and Paul Sweeney on Bloomberg Radio, YouTube, and Bloomberg Originals.
On today's Bloomberg Intelligence Show, we dig inside the big business stories impacting Wall Street and the global markets. Each and every week, we provide in-depth research and data on some of the 2,000 companies and 130 industries that our analysts cover worldwide. Today, we'll look at how a heavy promotional campaign at AT&T impacted its quarterly earnings.
Plus, we'll break down how delayed orders at US retailers impacted earnings for toy maker Mattel. But first, we begin with earnings from the streaming giant Netflix. Netflix shares fell the most since April 2022 after its third quarter earnings missed analyst estimates.
This comes after Netflix had to pay about $619 million to settle a multi-year tax dispute with Brazilian authorities going back to 2022. The results may renew concerns about the sustainability of growth going into 2026. So for more we brought in Githa Ranganathan, Bloomberg intelligence analyst on US media.
We first asked Githa for her take on Netflix results. Nobody saw this coming in terms of this transaction tax. Uh it's a little bit of a catch-up charge that Netflix took uh in the third quarter and and there will be an ongoing charge as well about 40 million or so per quarter but again nothing that will materially impact results.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- netflix earnings
- tesla earnings
- at&t earnings
- luxury beauty deal
- telecom and consumer earnings recap
Companies and tickers mentioned
- NFLX
- TSLA
- T
- MAT
- HLT
- GE
- RTX
- Netflix
- Tesla
- AT&T
- Mattel
- Hilton
- GE Aerospace
- RTX
- Kering
- L'Oréal
- Bloomberg L.P.
Watch the episode
Watch “BI Weekend: Netflix, Tesla, AT&T Earnings | Bloomberg Intelligence” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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