Netflix (NFLX) Q1 Profit Nearly Doubles, Sales Rise 43%; Sees Competing Service from Dish
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Price: $79.59 -0.69%
Financial Fact:
Income before income taxes: 79.13M
Today's EPS Names:
BTTX, VAXX, ELYS, More
Financial Fact:
Income before income taxes: 79.13M
Today's EPS Names:
BTTX, VAXX, ELYS, More
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Netflix, Inc. (Nasdaq: NFLX) shares are trading lower after-hours Monday following first-quarter earnings which barely beat the Street, while the company added 3.6 million subscribers in the quarter.
The online movie rental company reported quarterly EPS rose 88% to $1.11, topping the consensus of $1.08.
Revenue for Netflix in the quarter was $706 million, up 43% from last year and better than the consensus of $703.6 million.
Netflix now has 23.6 million global subscribers, up 69 percent from last year. Internationally, Netflix added 290,000 subscribers in the quarter versus the 380,000 added in the fourth quarter.
Domestic operating margin during the first quarter increased above the company's target margin of 14% to 16%. "Going forward in Q2 and beyond, we expect DVD shipments to decline slightly Y/Y, spending on streaming content to increase substantially, and spending on marketing to decline from Q1, bringing our domestic operating margin back to our desired goal of around 14%." The company said domestic gross margin should return to the 30% -35% range as they spend more on streaming.
Commenting on competition, Netflix said it thinks Dish Network (Nasdaq: DISH) is likely to launch a substantial subscription streaming effort under the Blockbuster brand. However, the company said their biggest competitor over time may be Hulu Plus, or it may be free on-demand Internet video as a part of a consumer’s MVPD package, namely TV Everywhere.
Netflix commented on data caps in Canada, and recently changed the default setting for Canadian Netflix members to an encoding that consumes only 9 gigabytes for 30 hours of viewing versus 30 -70 gigabytes for 30 hours of viewing under our standard encoding. In the U.S., caps by AT&T and Comcast haven't been an issue.
Free cash flow of $79.3 million increased 108% from the same quarter last year and 55% from the fourth quarter. The company returned to buying back stock in the quarter and used $108.6 million in Q1 to repurchase 502,000 shares at an average cost basis of $216.48.
Looking forward, the company expects to end the second quarter with 24-24.8 million domestic subscribers and 900,000-1.05 million international subscribers. Netflix also sees revenue of $762-$778 million, versus the consensus of $763 million, and EPS of $0.93-$1.15, versus the consensus of $1.19.
Netflix last traded at $242.96, down 3.5% from the close of $251.67.
The online movie rental company reported quarterly EPS rose 88% to $1.11, topping the consensus of $1.08.
Revenue for Netflix in the quarter was $706 million, up 43% from last year and better than the consensus of $703.6 million.
Netflix now has 23.6 million global subscribers, up 69 percent from last year. Internationally, Netflix added 290,000 subscribers in the quarter versus the 380,000 added in the fourth quarter.
Domestic operating margin during the first quarter increased above the company's target margin of 14% to 16%. "Going forward in Q2 and beyond, we expect DVD shipments to decline slightly Y/Y, spending on streaming content to increase substantially, and spending on marketing to decline from Q1, bringing our domestic operating margin back to our desired goal of around 14%." The company said domestic gross margin should return to the 30% -35% range as they spend more on streaming.
Commenting on competition, Netflix said it thinks Dish Network (Nasdaq: DISH) is likely to launch a substantial subscription streaming effort under the Blockbuster brand. However, the company said their biggest competitor over time may be Hulu Plus, or it may be free on-demand Internet video as a part of a consumer’s MVPD package, namely TV Everywhere.
Netflix commented on data caps in Canada, and recently changed the default setting for Canadian Netflix members to an encoding that consumes only 9 gigabytes for 30 hours of viewing versus 30 -70 gigabytes for 30 hours of viewing under our standard encoding. In the U.S., caps by AT&T and Comcast haven't been an issue.
Free cash flow of $79.3 million increased 108% from the same quarter last year and 55% from the fourth quarter. The company returned to buying back stock in the quarter and used $108.6 million in Q1 to repurchase 502,000 shares at an average cost basis of $216.48.
Looking forward, the company expects to end the second quarter with 24-24.8 million domestic subscribers and 900,000-1.05 million international subscribers. Netflix also sees revenue of $762-$778 million, versus the consensus of $763 million, and EPS of $0.93-$1.15, versus the consensus of $1.19.
Netflix last traded at $242.96, down 3.5% from the close of $251.67.
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