Netflix, Inc. (NFLX) is expected to report weak earnings and strong sales for the second quarter, in its financial results scheduled to be released after markets close on Wednesday.
Netflix, Inc is all set to report its second quarter fiscal year 2015 earnings after the market close on Wednesday. The streaming giant is most likely to post stronger sales but weaker earnings.
According to the analysts, Netflix will report non-adjusted earnings of 30 cents per share, reflecting a decline of 73.3% year over year decline. The street also forecasts the company will report $1.649 billion of sales for the period, reflecting a 23% YoY increase for the quarter.
The company presently has 33.18% of surprise average for its adjusted earnings Netflix has also showed 3.78%bottom line growth in past five years. The sale surprise ratio stand at 0.41% and it has posted 21.56% increase in its top-line since the year 2010. The streaming giant has able to surpass the Street estimation 7 times on its bottom-line; it has also successfully surpassed the Street estimation on its top-line during the similar period.
Netflix reported unsatisfactory results previous quarter. For first quarter of fiscal year 2015, the company reported non-adjusted earnings of 38 cents per share, missing the Street estimations by 38 cents and demonstrating a 39.71% YoY drop in its bottom-line growth. The online streaming company also upset on its top-line growth, by a smaller margin. Its quarterly sales came on at $1.57 billion, missing analysts estimate by almost $1 million.
Netflix Inc. guidance for the second quarter FY15 looks relatively conservative as compared to analysts’ predictions. The company has predicted non-adjusted EPS of 26 cents for the quarter, slightly less than analysts’ expectations of 31 cents. Operating income is expected to come at approximately $59 million for the period, still less than $63.82 million forecasted by analysts Netflix also predicted a non-adjusted income of around $16 million, less than $18.42 million estimated by the analysts.
Reed Hastings, CEO of Netflix Inc. has stated that the company is likely to see looses in its global markets to go up to $101 million by mid 2015. The company is trying to expand into international markets like China, but that looks very challenging so far keeping in mind the competition in that market is rapidly growing. The company also announced a 7-for-1 stock split on last month that caused the shares to trade close to its 52 week high of $706.24.
The sell side firms have mixed opinion on Netflix stock. Almost 44 analysts covered the stock, put of which, 22 gave it a Buy, while 16 gave a Hold. The twelve month average target price stands at $653.03.