Netflix, Inc. (NASDAQ:NFLX) is set to release its earnings numbers for the three months through June on Monday July 21. The video streaming trailblazer is expected to show strong results as its original line-up continues to attract new subscribers. The second quarter saw the addition of Orange is the New Black season two to its service, and analysts are expecting that series to have had a material effect on subscriber numbers.

Netflix

Ahead of the release analysts following Netflix, Inc. (NASDAQ:NFLX) are looking for earnings of $1.13 per share from the company’s second quarter. Revenue in the same period is expected to come to a total of $1.3 billion. In the same three months of last year the company managed to earn 49 cents on revenue of $1.1 billion.

Netflix continues to draw viewers

Subscription additions is always an important number at Netflix, Inc. (NASDAQ:NFLX) and with the changes in the way the company prices its content, and its release of new original content, the second quarter earnings report will be no different. Edward S. Williams, an analyst writing about the company for BMO Capital Markets, says that the company should have added 900,000 subscribers in the US along with 1.1 million internationally during the period.

Williams reckons that Orange is the New Black is going to be a prime driver of subscriber additions, but there are some dissenters from this view. Topeka Capital Markets analyst David W. Miller warns against direct comparison of the second quarter’s subscriber adds to those of the same period last year. In the second quarter of 2013 Netflix, Inc. (NASDAQ:NFLX) boosted subscribers by 18.8% because of the addition of Arrested Development to its line up.

The BMO analyst is, however, the less optimistic of the two, putting a price target of $400 on the company’s stock. Miller of Topeka reckons the stock could rise to $517 in the next twelve months. The reason for William’s pessimism will not show itself in the second quarter results, but it will become apparent later in the year, at least according to the analyst.

Netflix expansions summons higher costs

Marketing costs are going to eat into Netflix Inc (NASDAQ:NFLX) profit in 2014 as the company seeks to launch its service in six more countries internationally. The addition of those countries will require a huge spend to build brand awareness and set up a base of subscribers. Williams of BMO reckons this will push the company’s operating margin down and result in a full-year EPS of $4.24.

Netflix, Inc. (NASDAQ:NFLX) has been priced as a web company since it went public, but that may not be the best way to look at the company. Despite its web heritage the firm operates as a media outlet and will face costs similar to any other content provider.

BMO is looking for an operating margin of less than 10% in the second quarter report and less than that for the full year. Netflix, Inc. (NASDAQ:NFLX) will have to work hard to ensure it keeps its content and marketing costs low, but in order to grow and maintain a subscriber base it can’t go too far.