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Here's What to Expect from Netflix (NFLX) Q4 Earnings

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Shares of Netflix (NFLX - Free Report) dipped slightly during regular trading hours Wednesday, one day before the streaming TV firm is set to release its fourth quarter and fiscal 2018 financial results. Despite the small negative movement, Netflix stock has soared roughly 50% since Christmas. So, let’s see what investors should expect from Netflix after the closing bell Thursday.

Overview

Netflix announced earlier this week that it raised prices on all of its streaming plans amid the growing cord-cutting revolution, highlighted the growth of smaller firms like Roku (ROKU - Free Report) . The firm’s most popular standard plan climbed from $11 to $13 per month. Meanwhile, Netflix lifted the price of its basic plan from $8 to $9 a month and its premium, four-screen offering from $14 to $16. Netflix last raised its prices in October 2017, and the new price hikes represent the largest increase since it launched streaming 12 years ago.

The company’s new prices should help Netflix continue to ramp up its original content spending, which is projected to reach $13 billion in 2018, as it fights to attract and retain subscribers. Netflix not only has to stand out against Hulu and Amazon (AMZN - Free Report) Prime, but soon enough Disney (DIS - Free Report) , Apple (AAPL - Free Report) , and AT&T (T - Free Report) . Not to mention, Google’s (GOOGL - Free Report) YouTube has original content and Facebook (FB - Free Report) is committed to a streaming expansion.  

Investors should know that Netflix has seen a significant amount of analyst positivity recently, from firms such as Raymond James and Goldman Sachs (GS - Free Report) . NFLX stock closed regular trading Wednesday down 0.92% to $351.39 a share, which marked a roughly 17% downturn from its 52-week high of $423.21.

 

Q4 Outlook  

Netflix expects to add 9.4 million subscribers in Q4 to bring its global total to 146.5 million. More specifically, the firm projected at the end of last quarter that it would add a total of 7.6 million new international members and 1.8 million U.S. subscribers. These are figures that Wall Street will watch very closely Thursday. For reference, Netflix added 8.3 million users in the prior-year quarter and 6.96 million in Q3.

Moving on, our current Zacks Consensus Estimate calls for Netflix’s Q4 revenues to surge 28.1% from the year-ago period to reach $4.21 billion. This would, however, mark a slowdown compared to Q3’s 34% climb and Q2 and Q1’s 40% expansion. Meanwhile, NFLX’s full-year revenues are projected to jump 35% from $11.69 billion in 2017 to reach $15.81 billion.

At the bottom end of the income statement, Netflix’s adjusted Q4 earnings are projected to plummet 39% from Q4 2017 to hit $0.25 a share. With that said, the firm’s full-year 2018 earnings are expected to skyrocket 110.4% to reach $2.63 per share.

Netflix is scheduled to release its Q4 financial results after the closing bell on Thursday. Make sure to come back to Zacks for a full breakdown of Netflix’s actual Q4 and fiscal 2018 financial results.

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