Netflix (NFLX) will report fourth quarter results in a Letter to Shareholders on its website soon after the bell. The earnings interview with management including Chief Executive Reed Hastings starts at 18:00 ET.

Netflix has guided for fourth quarter EPS of $0.51 (vs. $0.30 last year) with an operating margin of 8.7% (+350 basis points yr/yr) and revenue up 30% to $5.44 bln.

Netflix also guided for 7.6 mln global paid net subscriber additions (7 mln international and 600,000 US market)

Analysts expect the company to guide for an 8.5 mln increase in subs for the first quarter versus an 9.6 mln increase in the fourth quarter last year.

TECHS:

The streaming giant’s stock price has climbed over the last several months but Wall Street is worried about Netflix’s growing competition. Netflix stock is down roughly 1% over the last year, which is directionally down relative to the S&P 500 and all of its FAANG cohorts.

RESULTS:

Key highlights from Netflix's Fourth Quarter Shareholder Letter:

  • NFLX reported a large EPS beat including a tax adjustment for the year. Operating income more than doubled yr/yr to $459 mln but they missed the company's $475 mln forecast.

  • NFLX added 8.76 mln subscribers in the fourth quarter, which surpassed its 7.6 mln forecast. The company narrowly missed estimates on the domestic front, adding 442,000 subs, citing recent price increases and competitive launches. Netflix added a record number of subscribers outside of North America. Global subscribers were up 20% to 167 mln the end of 2019.

  • The primary reason the stock is down is that NFLX forecasted 7mln net subscriber additions in the first quarter. This comes in below the 8.5mln Wall Street estimate.

Netflix Q4 sub adds 8.8 mln vs. 7.6 mln guidance; sees Q1 subs adds 7 mln vs. 8.5 mln est

Netflix prelim Q4 GAAP EPS $1.30 not comparable to $0.53 S&P Capital IQ Consensus Estimate; revs $5.47 bln vs $5.45 bln S&P Capital IQ Consensus Estimate

Netflix sees Q1 $1.66 vs $1.18 S&P Capital IQ Consensus Estimate; sees revs $5.73 bln vs $5.74 bln S&P Capital IQ Consensus Estimate

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