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Netflix (NFLX) Posts Earnings Beat, Stock Dips on Weak Guidance

Ryan McQueeney

Netflix, Inc. (NFLX) just released its first-quarter 2017 financial results, posting earnings of $0.40 per share and revenues of $$2.637 million.

Currently, NFLX is a Zacks Rank #3 (Hold), but this ranking could be subject to change based on the results of today’s report. Shares of NFLX were down about 1.5% to $145.15 per share as of 4:20 P.M. EST, just minutes after its earnings report was released.

Netflix:

Beat earnings estimates. The company posted earnings of 40 cents per share, beating the Zacks Consensus Estimate of 38 cents per share.

Missed revenue estimates. The company saw revenue figures of $2.637 billion, just missing our consensus estimate of $2.641 billion.

The streaming service reached 98.75 million total members in the quarter, with 94.36 of those being paid, non-trial memberships. Netflix now has 50.85 million total domestic members and 47.89 million international members. This fell just short of the 99 million members that the company guided for in its previous report.

In today’s report, Netflix issued guidance for the second quarter of fiscal 2017. The company expects revenue of $2.755 billion and diluted earnings of $0.15 per share. The current Zacks Consensus Estimates call for revenue of $2.77 billion and earnings of $0.23 per share.

“For the last several years we’ve had flat operating margins due to established markets funding international expansion with every spare dollar we had… the major indicators of our progress were member and revenue growth and US contribution margins,” the company said in its shareholder letter. “Starting this year, we can be primarily measured by revenue growth and (global) operating margins as our primary metrics.”

Here’s a graph that looks at Netflix’s latest earnings performance history:

Netflix, Inc. Price, Consensus and EPS Surprise

Netflix, Inc. Price, Consensus and EPS Surprise | Netflix, Inc. Quote

Netflix is the world's leading Internet television network with millions of subscribers in nearly 50 countries who have access to an ever-expanding library of TV shows and movies, including original programming, documentaries and feature films. The company offers the ability to watch as subscribers want, anytime, anywhere, on nearly any Internet-connected screen.

Check back later for our full analysis on Netflix’s earnings report!

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