Netflix generated US$2.66 billion in free cash flow in the third quarter, beating Wall Street estimates, and increased its forecast for the year to about US$9 billion. Photo by Mario Tama/Getty Images/Postmedia files

Netflix Inc. shares fell the most in more than seven months after the world’s most valuable entertainment company said a tax dispute with Brazil cut into third-quarter earnings .

Operating income was US$3.24 billion in the three months ended Sept. 30, according to a statement Tuesday, about US$400 million below its own forecast and analysts’ estimates. The company’s outlook for the current quarter is largely in line with Wall Street projections.

Netflix had to pay about US$619 million to settle a multiyear tax dispute with Brazilian authorities going back to 2022.

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