The Country Caller will closely watch the operations of the 18-year-old company, as they have been a problematic area it in the past
Streaming giant Netflix, Inc. (NASDAQ:NFLX) is due to release its earnings for 4QFY16, while the Los Gatos based company is expected to end the year on a positive note. The street expects an EPS of $0.13 for the quarter while the revenues are expected to be $2.46 billion. While the bottom-line estimate is the highest in the last eight quarters, the odds of an earnings beat are also high given the sound track record. The Country Caller will closely watch the operations of the 18-year-old company, as they have been a problematic area it in the past.
Operations have continued to consume the liquid resources of the Scotts Valley based company. last quarter, Netflix lost over $900 million in operations, which added to our concern even though the market responded in a bullish manner. Those concerns still remain until we see improvements in this area. CFO, David Wells, has already said that the company intends to increase its reliance on original content, as costs will be lower.
Apart from operations, the company’s presence in international regions will also stay in focus as Mr. Hastings has emphasized on the need for growth in this segment if the company is to prosper. Sell side firm Wedbush has also raised its concerns in this area, as it believes that the company is not well poised to attract viewers outside the US.
TCC renders the upcoming earnings as a defining moment for investors as a lot about the $59 billion company’s current position is dependent on the numbers. Optimism can be seen on the expected numbers as shares of the company have registered an all-time high of $135 in the pre-market as at 4:02 AM EDT. Considering the reaction in last earnings, it is quite likely that we may witness a hyper increase in share prices, if the company is able to lure investors through numbers.