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Netflix reports earnings - What to know in the markets Thursday

Heidi Chung

The first ‘FANG’ stock is set to report Q4 earnings after the bell on Thursday. Media giant Netflix (NFLX) will be releasing financial results on the back of a big announcement on Tuesday that the company is raising prices for its approximately 58 million U.S. customers. Netflix has been burning through cash and is sitting on a mound of debt. The company’s fourth price hike in its 12-year history is aimed to help offset the cost to produce more original content and pay off some of the debt it owes to large studios.

But as always, it’s all about the subscribers. Netflix’s subscriber numbers have the power to dramatically move the stock, and analysts are expecting the streaming company to have added roughly 1.8 million domestic subscribers and 7.6 million international subscribers during Q4.

Wall Street is bulled up on Netflix, both ahead of earnings and on the price hike.

“We expect Netflix to report 4Q results well above and provide initial guidance for 1Q in-line or modestly above consensus after the close on Thursday. The strong release slate in the quarter, growing content library, and broadening distribution network combined to drive this outperformance, in our opinion, and should continue to do so in the year ahead as 2017/18’s significant increase in cash content investment pays off,” Goldman Sachs said in a note on Tuesday.

RBC Capital is saying that Netflix’s price hike will prove to be a successful move. “We believe this action has a high probability of success, further fueling the Netflix flywheel,” the firm said in a note on Tuesday.

Analysts polled by Bloomberg are expecting Netflix to have earned 39 cents per share on $4.21 billion in revenue.

In addition to Netflix, Morgan Stanley (MS) will be reporting earnings before the market open, and American Express (AXP) will release its report after the close.

Morgan Stanley is expected to report earnings of 89 cents per share on $9.35 billion in revenue, and American Express is expected to have earned $1.80 per share on $10.57 billion in revenue.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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