What to Look For in NetFlix $NFLX Earnings After Price Hikes

Streaming giant Netflix $NFLX is the first FANG company to release September quarter earnings after the close Monday. Investors are looking for updates on content, International reach and the recent price hikes.

 
Streaming giant Netflix $NFLX is the first FANG company to release September quarter earnings after the close Monday. Investors are looking for updates on content, International reach and the recent price hikes. The stock has risen to $200 with mutliple upgrades as it leads the Nasdaq to record highs.
 
 
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 Neflix Shares over the Past Years Have Risen Dynamically
 
 
Neflix Consenus Earnings Forecast
Analysts expect Netflix EPS of 32 cents a share excluding items, this is up from 12 cents in the year-earlier period. Revenue is expected to be up  30% year-over-year to $2.97 billion.
 
Netflix Key Subscriber Metric Forecasts to Watch
Netflix forecast adding 4.4 million net subscribers,
Includes 3.65 million international subscribers and 750,000 U.S. subscribers,
Forecasts 108.35 million subscribers worldwide.
 
Look for updates on penetration rates in Australia, Japan, India and South Korea services launched in late 2015 or early 2016. In the Q2 call Netflix  said it would invest more “on the ground” in Asia has lost just over $100 million in international markets. With a fall to $13 million in Q2 from $69 million a year earlier. Netflix has forecast it would see an international contribution profit for the whole of 2017.

How will U.S. subscriber numbers be affected in guidance?

On Oct. 5 raised its U.S. Standard and Premium plans by $1 and $2 per month, respectively, to $11 and $14. In 2016. $NFLX has said price hikes for customers previously grandfathered in at lower prices hurt subscriber growth for a while.

Content Library and Costs

Walt Disney Co. $DIS has said it will pull its films off Netflix by 2010 end and launch it’s own streaming service in 2019 that will become the exclusive home for Disney, Pixar, Marvel and Star Wars films.
 
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Netflix has also made moves on this front with it’s First Acquisition With Comic Publisher Millarworld. $NFLXplans to spend $7 billion on content in 2018.

Free Cash Flow (FCF)

Netflix is still burning cash due to its content investments, it has $15.7 billion in streaming content obligations. FCF was negative $2.2 billion last quarter. 
 
The reactions can be violent both ways on this release, be aware and nimble on this one.
 
 
Live From The Pit

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