Netflix Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Netflix (NASDAQ:NFLX) will unveil its latest earnings tomorrow, Wednesday, January 23, 2013. Netflix provides subscription service, streaming movies, and TV episodes over the Internet.

Netflix Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for a loss of 12 cents per share, a swing from profit of 73 cents in the year-earlier quarter. During the past three months, the average estimate has moved down from a loss of 8 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at a loss of 12 cents during the last month. For the year, analysts are projecting net income of 4 cents per share, a decline of 99.1% from last year.

Past Earnings Performance: The company has beaten estimates the last four quarters and is coming off a quarter where it topped forecasts by 8 cents, reporting profit of 13 cents per share against a mean estimate of net income of 5 cents per share.

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A Look Back: In the third quarter, profit fell 87.7% to $7.7 million (13 cents a share) from $62.5 million ($1.16 a share) the year earlier, but exceeded analyst expectations. Revenue rose 10.1% to $905.1 million from $821.8 million.

Here’s how Netflix traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

NFLX

Wall St. Revenue Expectations: Analysts are projecting a rise of 6.7% in revenue from the year-earlier quarter to $934.4 million.

Analyst Ratings: There are mostly holds on the stock with 17 of 28 analysts surveyed giving that rating.

Key Stats:

The company enters this earnings announcement with substantial revenue momentum. The company has averaged year-over-year revenue growth of 22.7% over the last four quarters.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.39 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.43 in the second quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 6.6% to $1.6 billion while assets rose 4.1% to $2.23 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)