This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The 3 Things to Look for in Netflix Earnings

Stocks in this article: NFLX

Updated from July 18th to include comments from BTIG analyst Richard Greenfield. 

NEW YORK (TheStreet) -- Since we last checked in on Netflix  (NFLX) financials, the online streaming company has been fortunate enough to welcome a lot of good news. TheStreet's Keris Lahiff previews Netflix's results:


WATCH: More tech videos on TheStreet TV | More videos from Keris Alison Lahiff

On the content production side, the Los Gatos, Calif.-based company has gone up against heavy-hitter HBO and proven itself equal to the premium cable channel in terms of quality of output. Any doubts as to whether its original series Orange is the New Black would be a one-hit wonder were put to rest when the second season premiered in June (all at once, binge-style) to positive critical reviews and fan reception.

Netflix's conviction in its original programming strategy was affirmed in early July when Emmy nominations for the 66th Primetime Emmy Awards were announced. Orange received 12, the most for any comedy, three for political drama House of Cards, already winner to three previous Emmys, and one for Ricky Gervais' Derek.

Can Apple Stop Defending Its iPod Cash Grab?

Yahoo!'s 'Community' Revival Means the End of Cancellations

Hollywood Sticks to What Sells and It's Not Comedies

Netflix is shopping its expansive library to new international markets as it commits to becoming a global force in online video. The company announced in May plans to significantly expand in Europe by the end of the year, notably in Germany, Austria, Switzerland, France, Belgium and Luxembourg.

In the same month, Netflix notified domestic users of a price hike for new members to $8.99 from $7.99, with existing members being grandfathered into the new pricing scheme over two years. While possibly only an incremental increase to revenue over the second quarter (based on the uptick in new subscribers), the extra cash generated from the raise has been bookmarked for investing in more content, which in turn will incent new subscribers into the fold. The Fundamentals

This has encouraged high expectations among analysts when the Internet TV network reports second-quarter earnings after the bell Monday, July 21. "While investor expectations have increased recently, we believe they remain achievable," wrote Pacific Crest Securities analyst Andy Hargreaves in a note.

Analysts polled by Thomson Reuters anticipate earnings to have more than doubled to $1.15 a share from 49 cents a year earlier, even as the company invests more in production and international expansion.

Revenue is expected to grow nearly 25% to $1.33 billion from just over $1 billion in the year-ago quarter. Analysts also expect sales to climb 5% sequentially, despite the company warning that its second quarter is typically seasonally weak, a byproduct of summer months in the U.S., its largest revenue-generating market.

The May price hike should give a slight bump to top- and bottom-line growth, though it remains to be seen whether the increase deterred new customers from signing up past the one-month free trial period.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,778.15 +421.28 2.43%
S&P 500 2,057.40 +44.51 2.21%
NASDAQ 4,743.2230 +98.9110 2.13%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs