S&P 500 component Netflix Inc. dropped to a first quarter loss, but results topped expectations. Netflix provides subscription service, streaming movies, and TV episodes over the Internet.
Netflix Earnings Cheat Sheet for the First Quarter
Results: Reported a loss of $4.6 million (8 cents per diluted share) in the quarter. The internet commerce had net income of $60.2 million or $1.11 per share in the year-earlier quarter.
Revenue: Rose 21% to $870 million from $719 million.
Actual vs. Wall St. Expectations: Netflix Inc. beat the mean analyst estimate of a loss of 28 cents per share. It fell short of the average revenue estimate of $869.3 million.
The company has now surpassed analyst estimates for four quarters in a row. It beat the mark by 18 cents in the fourth quarter of the last fiscal year, by 21 cents in the third quarter of the last fiscal year, and by 15 cents in the second quarter of the last fiscal year.
NFLX’s loss in the latest quarter breaks a three-quarter string of profits. The company reported a profit of $35.2 million in the fourth quarter of the last fiscal year, a profit of $62.5 million in the third quarter of the last fiscal year and $68.2 million in the second of the last fiscal year.
Looking Forward: For the next quarter, analysts are increasingly pessimistic about the company’s performance. The average estimates for the second quarter is at a loss of 18 cents per share, down from 7 cents ninety days ago. For the fiscal year, the average estimate has moved down from a profit of 28 cents a share to a loss of 32 cents over the last ninety days.
Netflix headlines may appear rosy as top and bottom lines were a beat but guidance on revenues and subrscriber adds perhaps rings the death knell on this mythical beast...
*NETFLIX SEES 2Q NET ADDS BELOW THOSE OF 2010 :NFLX US
*NETFLIX SEES 2Q REV. ABOUT $873M-$895M; EST. $893.4M :NFLX US
We can only hope that AAPL does not miss in any way on any metric ever...
Here is what not to put in your letter to investors when you are a zero barrier to entry streaming company whose business model is being assaulted by everyone, not least of all Apple.
We think our 2012 domestic streaming net adds will be about the same as in 2010, and that gross adds will approximately follow the 2010 seasonal pattern.
Due to the increased net adds quarterly seasonality, Q2 net adds will be below those of 2010, despite Q2 net adds following the traditional seasonal pattern, and despite us expecting to match 2010 in annual net additions.
and the funniest line ever in an official company filing:
We see nothing new or particularly concering this quarter to date in our member viewing, acquisition and retention. All are healthy.
Except your stock price...
Finally, this is how you destroy your company. What can one say but sweet streaming jesus: this must be what an exponentially accelerating dead cut has to look like.
And another hilarious chart: total "profit" per foreign international paying sub. We only hope they can make up for it in volume...