International User Growth to Aid Netflix (NFLX) Q3 Earnings?
Netflix NFLX is set to report third-quarter 2020 results on Oct 20.
The company’s international subscriber growth is expected to have been steady in the to-be-reported quarter due to the coronavirus-induced safe-distancing and lockdown norms that drove consumption of media content on the Internet.
Further, the availability of low-priced mobile plans in India, Indonesia, Malaysia, Philippines and Thailand is expected to have spiked Netflix’s subscriber strength in Asia-Pacific (APAC).
Click here to know how the company’s overall Q3 performance is expected to be.
APAC Momentum Expected to Drive Top Line
Courtesy of its diversified content portfolio, which is attributable to heavy investments in the production and distribution of localized, foreign-language content and an expanding international footprint, Netflix has been dominating the streaming space despite the launch of new services like Disney+ from Disney DIS and Apple TV+ from Apple AAPL, as well as existing services like Amazon AMZN prime video.
Moreover, robust regional-language content portfolio has helped Netflix improve its competitive position in APAC, Europe, Middle East & Africa (EMEA) and Latin America (LATAM).
Notably, APAC revenues surged 63% year over year to $569 million in second-quarter 2020. Moreover, revenues from EMEA and LATAM increased 43.5% and 16% to $1.89 billion and $785 million, respectively.
The Zacks Consensus Estimate for APAC revenues is pegged at $623 million, indicating 9.5% growth from the figure reported in the previous quarter.
Moreover, the consensus mark for EMEA revenues stands at $1.97 billion, suggesting 4.1% growth from the figure reported in the previous quarter.
Further, the consensus mark for LATAM revenues are pegged at $833 million, indicating 6.1% growth from the figure reported in the previous quarter.
Additionally, the third-quarter earnings call is expected to provide a sneak peek into Netflix’s content plans and spending strategy.
Markedly, this Zacks Rank #3 (Hold) company has been spending aggressively to build its original-show portfolio. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
This, in turn, is expected to have negatively impacted profitability in the to-be-reported quarter.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, SherazMian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
Click Here, See It Free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Apple Inc. (AAPL): Free Stock Analysis Report
The Walt Disney Company (DIS): Free Stock Analysis Report
Netflix, Inc. (NFLX): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.