Netflix Earnings on Deck

S&P 500 (NYSE:SPY) component Netflix (NASDAQ:NFLX) will unveil its latest earnings on Tuesday, October 23, 2012. 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 profit of 5 cents per share, a decline of 95.7% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 11 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 5 cents during the last month. Analysts are projecting a loss of one cent per share versus net income of $4.26 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 7 cents, reporting profit of 11 cents per share against a mean estimate of net income of 4 cents per share.

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A Look Back: In the second quarter, profit fell 91% to $6.2 million (11 cents a share) from $68.2 million ($1.26 a share) the year earlier, but exceeded analyst expectations. Revenue rose 12.8% to $889.2 million from $788.6 million.

Stock Price Performance: From September 19, 2012 to October 17, 2012, the stock price rose $11.48 (20.1%), from $57.04 to $68.52. The stock price saw one of its best stretches over the last year between August 8, 2012 and August 16, 2012, when shares rose for seven straight days, increasing 11.3% (+$6.51) over that span. It saw one of its worst periods between April 19, 2012 and April 30, 2012 when shares fell for eight straight days, dropping 25.2% (-$26.95) over that span.

Wall St. Revenue Expectations: On average, analysts predict $905.1 million in revenue this quarter, a rise of 10.1% from the year-ago quarter. Analysts are forecasting total revenue of $3.61 billion for the year, a rise of 12.8% from last year’s revenue of $3.2 billion.

Key Stats:

The company enters this earnings announcement with substantial revenue momentum. The company has averaged year-over-year revenue growth of 32.3% over the last four quarters.

Analyst Ratings: There are mostly holds on the stock with 19 of 30 analysts surveyed giving that rating.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.43 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 improved this liquidity measure from 1.42 in the first quarter to the last quarter driven in part by an increase in current assets. Current assets increased 3.8% to $2.14 billion while liabilities rose by 3.6% to $1.5 billion.

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

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