Netflix, Inc. (NASDAQ:NFLX) released its earnings report for the second fiscal quarter 2013 this afternoon after the market closed in New York. The video streaming service showed earnings of $0.49 per share for the three month period on revenues totaling $1.07 billion. On today’s market, stock in Netflix, Inc. (NASDAQ:NFLX) trended downward and finished the day at $261. 96 per share.
The same quarter of 2012 saw Netflix, Inc. (NASDAQ:NFLX) earn 11 cents per share on revenue of $889 million. Analysts following Netflix, Inc. (NASDAQ:NFLX) were looking for earning per share of 40 cents form today’s earnings report by consensus on revenue of $1.07 billion.
Gates Capital: Why (Free) Cash (Flow) Is King
Gates Capital Management's ECF value fund has earned strong returns for investors since its inception in June 1996. The ECF, or Excess Cash Flow Fund, had returned 12.9% annualized since inception to the end of September 2020. That was compared to 8.9% for the S&P 500 total return index and 7.4% for the HFRI Event-Driven Read More
Netflix, Inc. (NASDAQ:NFLX) has been unpredictable in the past, particularly when it comes to earnings reports. After the company delivered a positive surprise last January, shares surged to levels called unsustainable by many. When April’s earnings report came around many analysts said there was little upside, even if the company beat expectations, but the stock shot up again.
Netflix, Inc. (NASDAQ:NFLX) has grown in value by more than 180% since the year began and more than 215% in the last twelve months. The company’s stock price has expanded very quickly, and that leaves it vulnerable to all of the problems of a quickly growing company; bubble trouble, self-fulfilling prophecy, and little price support. Netflix investors will be watching trading nervously after hours, and might be trading shares themselves come morning.
Full stream ahead
Despite the growth in the number of subscribers under the Netflix Inc. (NASDAQ:NFLX) belt, the company faces a host of challenges. these challenges are likely to be discussed in the conference call the company plans to host at 6 pm EDT this afternoon.
Through the rest of 2013, Netflix, Inc. (NASDAQ:NFLX) will have big worries about competition. The company’s lucrative showing in the streaming market is beginning to attract all sorts of players, including tech giants. Netflix has a certain amount of a moat, but not enough to disperse problems from the likes of Apple Inc. (NASDAQ:AAPL).
Netflix, Inc. (NASDAQ:NFLX) is also going to hit growth ceilings more and more in the coming year. The company will need to skillfully manage ceilings like European content streaming deals and streaming saturation if it wants to continue the growth that has blown the market away so far in 2013.