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Netflix (NFLX) Gears Up for Q1 Earnings: What to Expect

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Netflix (NFLX - Free Report) is set to report first-quarter 2020 results on Apr 21.

The company forecasts its first-quarter earnings to be $1.66 per share, implying year-over-year growth of 118.4%.

The Zacks Consensus Estimate is currently pegged at $1.62 per share, having been revised 1.8% downward over the past 30 days. However, the figure indicates 113.2% growth from the year-ago quarter’s reported figure.

Moreover, total revenues including the DVD business, are anticipated to be $5.73 billion, up 26.8% year over year. The consensus mark for first-quarter revenues is currently pegged at $5.70 billion, suggesting 26.1% growth from the figure reported in the year-earlier quarter.

Notably, the company boasts a stellar earnings history, beating the Zacks Consensus Estimate in all the trailing four quarters, the average being 57.6%.

Netflix, Inc. Price and EPS Surprise

Netflix, Inc. Price and EPS Surprise

Netflix, Inc. price-eps-surprise | Netflix, Inc. Quote


Let’s see how things are shaping up for this announcement.

Coronavirus Outbreak Likely to Aid Subscriber Growth

Netflix’s solid content portfolio aided it to successfully withstand the coronavirus-led stock market rout in first-quarter 2020. The company is ahead in the streaming race despite increased competition from the launch of new services like Disney+ from Disney (DIS - Free Report) and Apple TV+ from Apple (AAPL - Free Report) and existing services like Amazon (AMZN - Free Report) prime video.

Coronavirus-induced social distancing and lockdowns drove consumption of media content on the Internet as more and more people were compelled to stay at home since late February.

Courtesy of its diversified content portfolio, which is attributable to its heavy investments in production and distribution of localized, foreign-language content and an expanding international footprint, Netflix is expected to have hugely benefited from this upswing.

Further, the launch of low-priced mobile plans in India, Indonesia, Malaysia, Philippines and Thailand is expected to have spiked Netflix’s subscriber strength in APAC.

Netflix expects its first-quarter paid subscriber addition to be 7 million, lower than 9.6 million added in the year-ago quarter. This Zacks Rank #2 (Buy) company projects to have 174.09 million paid subscribers globally, up 16.9% from the year-ago quarter at the end of first-quarter 2020. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for U.S. net subscription additions is pegged at 1.08 million, indicating a decline from 1.74 million reported in the year-ago quarter. Moreover, the consensus mark for international net subscription addition stands at 7.15 million, suggesting a fall from 7.86 million that the company added in the year-ago quarter.

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