Netflix set to report third-quarter earnings after the bell


Co-founder and director of Netflix Reed Hastings delivers a speech as he inaugurates the new offices of Netflix France, in Paris on January 17, 2020.

Christophe Archambault | AFP | Getty Images

Netflix is set to report third-quarter earnings after-the-bell on Tuesday.

Here’s what analysts are expecting:

  • Earnings per share (EPS): $2.56 according to Refinitiv survey of analysts
  • Revenue: $7.48 billion, according to Refinitiv
  • Global paid net subscriber additions: 3.84 million, according to StreetAccount

Netflix is expected to report 3.84 million global paid net subscriber adds, according to StreetAccount estimates. The company is positioned to report $2.56 earnings per share on $7.48 billion in revenue, according to Refinitiv estimates.

Netflix added 1.54 million users in its second quarter, beating out expectations. But most analysts already had their eyes set on its third-quarter report, since the company would be kicking off a slate of widely anticipated content. Because of the Covid-19 pandemic, a large amount of films and shows had been pushed back into the second half of this year and next year.

Many analysts already appear confident with the company’s content strategy, partly thanks to the success of “Squid Game,” the company’s Korean dystopian that set viewing records.

“We believe its popularity highlights the success and globe-spanning power of Netflix’s original content strategy,” Stifel analysts wrote in a note. A Bloomberg report from Saturday said Netflix anticipates “Squid Game” to create nearly $900 million in value for the streamer. Wedbush analysts said the show could also boost fourth-quarter subscriber numbers.

The company is expected to continue releasing content, and any breakout films and shows will likely show benefits through the end of the year.

“As Netflix continues to release at such high volume and increasingly release international content across its global network, we expect that on occasion it will hit such goldmines that can attract new subscribers and limit churn for a period of time,” Wedbush analysts wrote in a research note.

Aside from streaming numbers, analysts will be watching gaming initiatives, merchandising and competition from the likes of Disney+ and other streaming services.

Even if Netflix does beat Wall Street expectations, shares may be a bit rocky in the following days. Netflix stock has traded lower the day after earnings nine out of the last 12 quarters, according to Bespoke data. The third quarter is typically the company’s most volatile season, while Q4 is often the company’s biggest winner.

This is a developing story. Check back for updates.

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