Netflix earnings preview: Will a price hike and Disney showdown hamper growth?

Netflix is set to report its latest earnings on Monday. Those quarterly headlines tend to contain positive news for the streaming video giant–about its subscriber growth, especially–but what should we expect as the company preps its letter to investors for Q3?

• $2.97 billion. That’s how much quarterly revenue Netflix is expected to report, according to TheStreet, a 30% increase year over year. The company is expected to report earnings per share of 32 cents, up from 12 cents last year.
• More international growth. Since it announced its “Netflix everywhere” expansion to 130 new countries early last year, most of its subscriber growth has (unsurprisingly) come from outside the U.S. Of the 4.45 million new subscribers Netflix is expected to announce, the vast majority will once again come from overseas. Asia is especially important for Netflix here.
• Will the price hike affect growth? As announced this month, the price of Netflix’s standard tier will go up $1, while its premium 4K tier will increase by $2. While it’s too early to tell if the monthly price increases will affect Netflix’s subscriber numbers (as increases have in the past), listen carefully to see if CEO Reed Hastings and company try to adjust investor expectations around its future subscriber growth. It will also be interesting to see how they address the issue of Disney removing its content from the service. Netflix’s stock took a hit when Disney’s move was announced in early August, but it has since bounced back.

Whatever happens, Wall Street seems optimistic. Netflix shares passed the $200 mark for the first time earlier today. The company will deliver third-quarter 2017 financial results on Monday after the closing bell. You can get the full results here.JPT