Netflix (NFLX) is expected to disclose its fourth quarter 2020 earnings after closing on Tuesday, with investors and analysts focused on how the video streaming giant continues to react to the influx of new users attracted to the service amid coronavirus pandemic.
Here’s what Wall Street expects from the company, as compiled by Bloomberg, compared to its performance in the same quarter last year.
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Recipe: $ 6.63 billion expected against $ 5.46 billion in the fourth quarter of 2020
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Earnings per share: $ 1.36 expected against $ 1.30 in the fourth quarter of 2020
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Global paid subscriber additions: 6.03 million expected against 8.76 million in the fourth quarter of 2020
Netflix’s stock price in recent months has fallen victim to its own success. The company was one of the biggest beneficiaries of the blockades and closings of entertainment venues caused by the pandemic. In the first nine months of 2020, the streaming service added an incredible 28.1 million paid subscribers, surpassing the 27.8 million it added throughout 2019.
But this dramatic increase in new users at the beginning of the year meant slower growth in the third quarter, with the platform adding just 2.2 million new subscribers, compared to the 3.3 million that analysts had expected.
Netflix’s stock price has dropped 4.5% since the third quarter earnings report compared to the S&P 500, which rose 9.4% in the same period.
The recent price increases Netflix announced to US consumers in October will also be in focus during earnings. The company now charges $ 14 per month for a standard subscription, over $ 13, and $ 18 per month for a premium subscription, over $ 16.
Still, analysts seem optimistic about the company’s future.
“Looking ahead, we remain positive about the long-term outlook for media streaming and the respective role of the NFLX in it,” wrote Eric Sheridan of UBS in a recent analyst note.
See too: Netflix has a high barrier to overcome as the 2021 movie blitz takes shape, with gains in focus
Piper Sandler analyst Yung Kim offered a similar tone in a recent note, writing: “As consumers engage in less leisure travel and entertainment outside the home, we believe that Netflix can continue to benefit from a increased submissions, as well as reduced turnover. “
Of course, Netflix also has a number of new competitors to contend with in the video streaming space. Outside of traditional rivals such as Amazon’s Prime Video and Hulu (AMZN), the company now has to fight Disney + (DIS), which added 73.7 million subscribers in its first year of availability; as well as HBO Max (T), which now has 57 million subscribers.
To fight back, Netflix will unveil a series of new content in 2021. The company recently announced that it will release a new movie every week this year, including “Malcom and Marie”, which is already getting a lot of attention from critics, and “Don’t Look Up ”, which has a star-studded cast, including Leonardo DiCaprio, Meryl Streep, Jennifer Lawrence and Jonah Hill.
Netflix’s competitors are also not standing still. Disney + will have an onslaught of new content on offer in 2021, including programs from its biggest franchises: Marvel and “Star Wars”.
This is a victory for us, television addicts, but what it means for Netflix is yet to be seen.
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