Netflix Q2 2016 Earnings: Analysis & Charts

Netflix Q2 2016 Earnings: Analysis & Charts
With Netflix Inc. (NASDAQ:NFLX) set to report its Q2 earnings after the close today (Monday 18), wanted to provide ValueWalk readers with data, charts and analysis ahead of the announcement. Senior Analyst, Clement Thibault has given the below analysis on 4 things to watch out for:
Netflix’s forecast for Q2 2016 is $0.02 EPS on $2.11B expected. Meeting expectations would mean the company will report 25% growth in revenue year-over-year…
“It’s entirely possible they’ll continue this trend again in Q2 2016, but expectations might need to be re-adjusted going forward to the next earnings season.”
But revenues aren’t everything…
“Last quarter, NFLX missed expectations on new international subscriptions, which sent shares tumbling from $108 to just $94, or a loss of 13%. This time around, Netflix said it expected to add 2 million international subscribers, which is well below Wall Street’s expectation of 3.5 million subscribers.” 
And then there’s troubles in Asia…
“Most significant, Netflix—like many other content providers—is still barred from entering the heavily regulated Chinese market.”
So what about the price hike in May…
“Back in May, Netflix began rolling out a gradual price hike to all its customers, raising rates from $7.99 to $9.99. While the price hike will inevitably lead to a loss of some subscribers, it will also bolster the company’s revenue by almost 25%. As the company is unlikely to lose 25% of its customer base, this should prove to be a good move by management; We should see some of the benefit in today’s Q2 report.”
Please find a chart below depicting Netflix’s Q1 earnings drop and a chart of previous earnings.
Inline image 1      Inline image 2

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