Earnings Watch – Netflix and Kimberly-Clark


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Netflix ( NFLX ) and Kimberly-Clark ( KMB ) are scheduled to discuss quarterly earnings on Monday, April 25. Here we recap our thoughts ahead of the conference calls in order to provide a roadmap to guide investors through the numbers.


Will Netflix's be able to maintain its aggressive pace of subscriber growth? There are a few factors at play here. First, the company introduced a streaming-only plan at a lower price towards the end of 2010 that has led to subscriber acceleration. Apart from this, expansion in Canada has been helpful.

However, there may be a slowdown in subscriber additions due to certain factors. First, Netflix might face competition from the Amazon Prime video streaming service that was launched last quarter. Second, given the recent subscriber surge and Netflix's subscriber base (already approaching that of Comcast), Netflix now be in the flatter part of the s-curve in terms of service adoption. In other words, the rate of subscriber additions should decelerate going forward. Some seasonality will help keep subscriber additions elevated in the coming months, but we are unlikely to see the same pace of growth as Q4 2010.

Click here for our full pre-earnings analysis of Netflix


Kimberly-Clark is a consumer goods giant that makes items like Kleenex tissues, Huggies diapers and Kotex sanitary pads.

To combat rising input costs, Kimberly-Clark announced price increases in March ranging from 3% to 7% in diapers and around 7% in tissues, to be implemented in the second and third quarter of this fiscal year for its North American business. We look for any indications of continued or additional price increases to help offset costs.

With Kimberly-Clark's plans of raising prices in the second half of this fiscal year, we expect management to employ more focused marketing campaigns to sustain its market share despite the higher prices.

Click here for our full pre-earnings analysis of Kimberly-Clark

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Investing Ideas , Stocks , US Markets
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