Netflix (NFLX) Set to Report Q4 Earnings: What to Expect?
Netflix NFLX is set to report fourth-quarter 2021 results on Jan 20, 2022.
The company forecasts its fourth-quarter earnings to be 80 cents per share, suggesting a year-over-year decline of 32.8%.
The Zacks Consensus Estimate for earnings is currently pegged at 82 cents per share, unchanged over the past 30 days. The figure indicates 31.09% decline from the year-ago quarter’s reported figure.
Netflix expects total revenues to increase 16.1% year over year to $7.71 billion. The consensus mark for fourth-quarter revenues is currently pegged at $7.71 billion, suggesting 15.97% growth from the figure reported in the year-ago quarter.
Netflix’s earnings missed the Zacks Consensus Estimate in two of the trailing four quarters while beating the same in the remaining two, the average surprise being 7.67%.
Netflix, Inc. Price and EPS Surprise
Netflix, Inc. price-eps-surprise | Netflix, Inc. Quote
Let’s see how things are shaping up for this announcement.
Factors to Consider
Netflix has been facing stiff competition in the streaming space from the likes of Disney+ by Disney DIS, HBO Max, Comcast’s CMCSA Peacock, Paramount+, and Apple TV+ by Apple AAPL.
Comcast’s streaming service, Peacock, has gained significant traction amid the coronavirus-led increased media consumption.
Disney recently revealed that it will increase its total content budget by $8 billion year over year, reaching a total of $33 billion in 2022. The decision was based on the intention to support its direct-to-consumers services, which primarily include Hulu, Disney+ and ESPN+.
Apple has been looking to expand Apple TV+’s footprint in the live sports arena. Apple TV+ has been lagging due to the lack of an extensive library of children and family-focused shows.
Nevertheless, Netflix has been witnessing sluggish subscriber growth in recent times, primarily due to rising competition and easing of coronavirus-induced social-distancing norms.
However, courtesy of its diversified content portfolio, attributable to Netflix’s heavy investments in production and distribution of localized, foreign-language content and an expanding international footprint, the company is still dominating the streaming market.
Netflix’s shares have returned 4.8% in the past year, outperforming the Zacks Broadcast Radio and Television industry’s decline of 0.8%.
This Zacks Rank #3 (Hold) company expects to end the fourth quarter of 2021 with 222.06 million paid subscribers globally, indicating growth of 9% from the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for paid memberships at the end of the period is pegged at 221.9 million, slightly lower than management’s expectation.
Netflix’s fourth-quarter 2021 subscriber growth is expected to have been driven by a strong slate of releases that included Maid, Squid Game, returning seasons of The Witcher, You, Tiger King and Cobra Kai as well as the last season of La Casa de Papel (aka Money Heist).
Notable movie releases included Red Notice, Don’t Look Up, The Harder They Fall, Army of Thieves and The Unforgivable.
The Zacks Consensus Estimate for paid total streaming net membership addition is pegged at 8.493 million, slightly lower than Netflix’s expectation of 8.50 million for the to-be-reported quarter.
Netflix’s growing popularity in Asia Pacific (APAC) and Latin America (LATAM), thanks to its diversified content offerings in regional languages, is expected to have driven top-line growth.
The consensus mark for fourth-quarter 2021 APAC revenues is pegged at $909 million, indicating 32.7% growth from the figure reported in the year-ago quarter. The Zacks Consensus Estimate for LATAM revenues is pegged at $930 million, suggesting almost 18% growth from the figure reported in the previous quarter.
Moreover, consensus mark for the Europe, Middle East & Africa revenues is pegged at $2.54 billion, suggesting 18.8% growth from the figure reported in the year-ago quarter.
The Zacks Consensus Estimate for United States and Canada revenues stands at $3.30 billion, indicating 10.6% growth from the figure reported in the year-ago quarter.
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