Investors Are Expecting Netflix to Crush Wall Street’s Expectations
Estimize | Oct 14, 2014 01:16AM ET
Netflix (NASDAQ:NFLX) is scheduled to report earnings after the market closes on Wednesday, October 15. Buy side and independent analysts on Estimize are expecting the online streaming video company to keep up its hot streak and smoke the expectations from Wall Street.
There are two forces working in opposite directions which are expected to define the success of Netflix’s quarter. On the bright side, Netflix raised subscription prices last quarter, which will mean more profits per dollar taken in as revenue. In its previous earnings announcement Netflix noted that the impact of the price hike on new signups was minimal.
The other side of the coin is not so much a negative as it as a temporary impediment to short term earnings. In September Netflix doubled its European coverage by launching in 6 additional countries including 2 massive markets, France and Germany. The costs associated with expanding service will hold Netflix back a bit on Wednesday, but should foster healthy long term growth.
This quarter the consensus from 67 contributors on Estimize is that Netflix will report $0.99 in earnings per share, 6 cents higher than Wall Street is predicting, $0.93. This is the largest difference between the two groups’ earnings expectations that we’ve seen since FQ4 of 2012 when Estimize was 6 cents above the Street and Netflix crushed analyst expectations.
Analysts on Estimize are expecting profits to slip slightly compared to last quarter, but still rise by 90% on a year over year basis. Netflix has been expanding at such a fast pace that a 90% yoy gain would be Netflix’s lowest rate of earnings growth since its 4th fiscal quarter of 2012. However, with Netflix’s global expansion ambitions, a slight quarter over quarter slip on the bottom line is nothing to be concerned about, especially if Netflix can deliver the 99 cents in EPS that investors expect.
Original post
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.