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3 Highlights for Investors before Netflix’s Earnings

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Today, Netflix (NASDAQ:NFLX) plans to release its earnings for the first quarter of 2020 after the market close. Notably, the company’s earnings report for the quarter ending in March will arrive before the reports from its peers.

Walt Disney (NYSE:DIS), whose Disney+ video service recently hit a milestone of 50 million subscribers, plans to report its March quarter results on May 5. Apple and Amazon (NASDAQ:AMZN) both plan to report their March quarter results on April 30. Apple runs the Apple TV+ video service, while Amazon has the Prime Video service. Notably, both of the services compete with Netflix.

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Netflix’s earnings expectations

Netflix expects a first-quarter EPS of $1.66 on revenue of $5.73 billion. In contrast, Wall Street analysts expect Netflix to report an EPS of $1.64 on revenue of $5.75 billion.

Netflix’s earnings reports have an uneven track record compared to the consensus estimates. However, Netflix’s first-quarter results have beat consensus estimates in the past two years. In the first quarter, the company posted an EPS of $0.76 on revenue of $4.52 billion. The results beat the consensus estimates, which called for an EPS of $0.57 on revenue of $4.50 billion.

Subscribers

For many investors, Netflix’s earnings report isn’t complete without a view of the company’s subscribers. Currently, the company is above the competition in terms of video subscribers. Netflix finished 2019 with 167 million subscribers. Disney+ finished the year with 26.5 million subscribers even though it only launched in November. Currently, Apple and Amazon don’t report their video subscriber numbers. Amazon’s Prime Video service is offered as a package for Prime loyalty program members. The company finished 2019 with over 150 million Prime members.

Netflix’s earnings forecast called for the addition of 7.0 million subscribers in the first quarter. The amount would take the company’s total subscribers to 174 million.

The lockdown measures amid the COVID-19 pandemic have boosted the demand for home entertainment, including video streaming. The outbreak has created an opportunity for Netflix to sign up more customers.

Netflix stock rebounds after pandemic sell-off

Notably, Netflix’s earnings report will arrive at a time when the stock has been on an impressive run. The stock rose by 3.44% on Monday and closed above $437. Netflix stock has rebounded from the lows it fell into amid the pandemic sell-off last month. Now, Netflix has risen by more than 35% for the year. In contrast, the S&P 500 has fallen by 12% for the year.

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