Upon Monday's market close, three big names have reported earnings results for fiscal Q2 2016: premier streaming content firm Netflix (NFLX - Free Report) and overall tech behemoth IBM (IBM - Free Report) posted quite varied fiscal Q2 numbers. While IBM modestly topped expectations, Netflix looks to have wildly over-promised its Q2 subscriber numbers.
Netflix has topped the consensus for Q2 earnings, but every other metric listed in the company's report after the bell today came in much lower that expected. Revenues of $1966 million missed the Zacks consensus of $2110 million. Total net subscriber adds of 160K was far beneath the 532K the company projected. International subscriber numbers came in 600K lower than anticipated. EPS guidance for Q3 is also lower than expectations: 5 cents per share, compared with 7 cents in the previous consensus.
Immediately in after-hours trading, NFLX shares have plummeted more than 15%. Netflix shares had already sunk more than 13% year-to-date. The company has chalked up much of the disappointment to the "ungrandfathering" of subscribers, amounting to price hike churn. Netflix expects Q3 subscriber numbers to double next quarter, but plenty of investors will think twice after such a profound miss in such a key business element.
Further, Netflix CEO Reed Hastings remarked that the regional sales climate in China -- understood to be the next major frontier for Netflix's growth -- was becoming "more challenging," and that the company will "continue to explore options." Hastings pointed out the company did not feel it has lost market share to competitors like Amazon Prime and Hulu which resulted in the company's poor performance.
IBM posted an earnings and sales beat today after the bell, bringing in $2.95 per share on $20.24 billion in revenues, easily topping the $2.87 per share and $20.08 billion of the Zacks Consensus Estimates. This mark's IBM's 4th straight positive earnings surprise on impressive Cognitive Solutions (Watson) results -- $4.7 billion, better than the $4.5 billion analysts had expected. Also, the annual run rate for IBM's cloud-based solutions is up $2.2 billion from the year-ago quarter, to $6.7 billion.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Upon Monday's market close, three big names have reported earnings results for fiscal Q2 2016: premier streaming content firm Netflix (NFLX - Free Report) and overall tech behemoth IBM (IBM - Free Report) posted quite varied fiscal Q2 numbers. While IBM modestly topped expectations, Netflix looks to have wildly over-promised its Q2 subscriber numbers.
Netflix has topped the consensus for Q2 earnings, but every other metric listed in the company's report after the bell today came in much lower that expected. Revenues of $1966 million missed the Zacks consensus of $2110 million. Total net subscriber adds of 160K was far beneath the 532K the company projected. International subscriber numbers came in 600K lower than anticipated. EPS guidance for Q3 is also lower than expectations: 5 cents per share, compared with 7 cents in the previous consensus.
Immediately in after-hours trading, NFLX shares have plummeted more than 15%. Netflix shares had already sunk more than 13% year-to-date. The company has chalked up much of the disappointment to the "ungrandfathering" of subscribers, amounting to price hike churn. Netflix expects Q3 subscriber numbers to double next quarter, but plenty of investors will think twice after such a profound miss in such a key business element.
Further, Netflix CEO Reed Hastings remarked that the regional sales climate in China -- understood to be the next major frontier for Netflix's growth -- was becoming "more challenging," and that the company will "continue to explore options." Hastings pointed out the company did not feel it has lost market share to competitors like Amazon Prime and Hulu which resulted in the company's poor performance.
IBM posted an earnings and sales beat today after the bell, bringing in $2.95 per share on $20.24 billion in revenues, easily topping the $2.87 per share and $20.08 billion of the Zacks Consensus Estimates. This mark's IBM's 4th straight positive earnings surprise on impressive Cognitive Solutions (Watson) results -- $4.7 billion, better than the $4.5 billion analysts had expected. Also, the annual run rate for IBM's cloud-based solutions is up $2.2 billion from the year-ago quarter, to $6.7 billion.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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