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Netflix, Inc. Message Board

  • getintoh20 getintoh20 Apr 23, 2013 8:50 AM Flag

    Overall cash flow from operations to negative $42 million

    Netflix reported operating profits of $31.8 million and adjusted earnings per share of 31 cents in the first quarter of 2013. Those figures, however, excluded $45 million in quarterly cash costs related to original content that pushed overall cash flow from operations to negative $42 million.

    Similarly, in the fourth quarter of 2012, Netflix reported $19.6 million in operating profit but negative $51 million in operating cash flow, driven by un-expensed original content spending.

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    • This is a scam.

      Sentiment: Strong Sell

    • As of the first quarter, Netflix's cash flow statement shows $591 million in cash spent on its streaming content library, but just $485 million in streaming content expense amortized over the period.

      With cash flow from operations to net income divergent by about $100 million, Netflix has set a very high bar. The company, after all, has only reported about $10 million in net income over the past two quarters.

      Continued negative operating cash flow on original content will likely also remain a factor for all of 2013, according to Netflix's own statements.

      "The investments that will continue to weigh on our cash flow relative to net income are Originals and non-Originals content (ongoing) and our Open Connect conversion (primarily in 2013)," the company said in its earnings release Monday.

      Those comments appear to differ from the fourth quarter, when Netflix said a divergence in cash flow and expense would end in the first quarter.

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