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Technology Stocks : Netflix (NFLX)
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From: Glenn Petersen7/15/2017 9:49:04 AM
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Did Netflix Cash In On Its ‘Strongest Content Quarter Ever’?

The streaming video company had several hit shows, and analysts think that helped it woo more subscribers.

By Emily Bary
Barron's
July 14, 2017 1:01 p.m. ET

Wall Street thinks there are multiple reasons why Netflix is likely to announce considerable growth in its U.S. subscriber base when it reports quarterly earnings Monday. High-school drama 13 Reasons Why is probably the biggest, but it isn’t the only one.

The show, which premiered March 31, generated especially strong social-media buzz and search traffic. “We expect Netflix to call out 13 Reasons Why,” Doug Anmuth wrote this week, since it performed better in Google Trends than several other popular Netflix titles.

While the spring quarter tends to be a relatively slow one for Netflix, investors are encouraged by the fact that the company released new seasons of hit shows Orange is the New Black and House of Cards during the period. Anmuth thinks this was “perhaps Netflix’s strongest content quarter ever.”

The question, however, is how many subscribers actually sign up for Netflix just to watch new seasons of shows that have been out for five years and are arguably past their prime. Enthusiasm for Orange is the New Black and House of Cards has cooled, Jefferies analyst John Janedis recently noted.

Nonetheless, Wall Street has high hopes for Netflix, projecting that the company added 631,000 net subscribers in the U.S. during the quarter, according to FactSet. The company only added 162,000 a year ago.

On the international side, investors are encouraged by growth prospects in Europe and Latin America. Wall Street estimates that the company added 2.6 million net members overseas, up 70% from a year prior. In general, Netflix shares tend to rise and fall based on the company’s ability to add new subscribers.

Overall, analysts are calling for $2.7 billion in revenue and 16 cents a share in earnings.

Big Picture: Investors are betting that Netflix’s second-quarter content slate drove a heavy volume of subscriber additions.

barrons.com
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