NETFLIX INC (NFLX): Free Stock Analysis
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Movie streaming giant
) announced earnings just after the bell, EPS of $0.31,
surpassing Zacks consensus estimate of $0.18. Revenues were
in line with estimates at $1.02 billion.
The street expected an earnings beat before the bell (Zacks
consensus's were trending upwards for the past 60 days, and NFLX
had four straight quarters with an average positive earnings
surprise of 153.69%), and once the Q1 numbers were released, the
stock surged 21% in afterhours trading.
As we approached the earnings announcement, NFLX rose over 6% in
anticipation of a strong earnings beat, but there were a few
concerns by covering analysts. First, new subscriptions
needed to come in line with analysts' expectations of 1.84
million; Netflix brought in 3.04 million new subscribers
(worldwide total of just over 36 million) on the back of the new
hit series House of Cards (not to mention the anticipated release
of Arrested Development on May 26th). Secondly, increased
competition by Verizon (Redbox Instant), Amazon Instant, and
Kindle Fire HD tablet. With the very strong earnings
numbers, it is evident that NFLX remains the industry leader, and
that the new comers have a long way to go to catch up to Netflix.
Moving into the second quarter, NFLX announced that it
forecasting earnings of $0.23 to $0.48 per share; Zacks consensus
estimate is currently at $0.27, but will most likely rise over
the next 30 days. On a negative point, NFLX rolled out
their two most high profile exclusives in the first half of 2013,
and analysts are weary of a lack of future drivers (new exclusive
content) to entice new subscribers.
Tomorrow, Zacks will have a detailed earnings report covering
subscriptions, ad revenue, and international expansion plans.