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Netflix (NFLX): Q1 EPS of -$0.08 beats by $0.19. Revenue of $870M (+28% Y/Y) in-line. Shares...

Netflix (NFLX): Q1 EPS of -$0.08 beats by $0.19. Revenue of $870M (+28% Y/Y) in-line. Shares -14.3% AH. (PR)
Comments (14)
  • JayXu
    , contributor
    Comments (266) | Send Message
     
    I dont understand. The result beats concensus a lot. How come the price dropped so much??
    23 Apr 2012, 04:12 PM Reply Like
  • Julius Ferraro
    , contributor
    Comments (495) | Send Message
     
    subscriber base didnt grow very much
    23 Apr 2012, 04:13 PM Reply Like
  • biobat
    , contributor
    Comments (3238) | Send Message
     
    The subscriber base actually grew fairly well and was near the upper end of Netflix' estimates. Considering they continued to lose over a million DVD subscribers, their domestic streaming growth was actually (and surprisingly) fairly impressive.
    23 Apr 2012, 04:22 PM Reply Like
  • Julius Ferraro
    , contributor
    Comments (495) | Send Message
     
    Yes it did but the whisper number may have been higher
    23 Apr 2012, 04:30 PM Reply Like
  • Gutone
    , contributor
    Comments (438) | Send Message
     
    The subscription data is bad but not ugly. It is the guidance that really spooked investors.

     

    http://seekingalpha.co...
    23 Apr 2012, 04:40 PM Reply Like
  • Denny_Chasteen
    , contributor
    Comments (700) | Send Message
     
    A lot of investors tend to hang on in the hopes of a resurrection miracle. What you were seeing with the price running up in the face or projected losses was that last gasp of a dying stock. People just somehow thought it would not sink. Like the Titanic. Like people who run back into a burning building in total denial of the situation at hand.

     

    NetFlix can rise again, however the business model will have to change drastically. I think RH will figure it out eventually. There are some good articles on SA that provide some possible ways that NFLX could improve their business model greatly.

     

    We will see what RH has to say in the conference call. Maybe he can make a case for growth and talk it back up some. I would buy it as a long term investment if it falls below 65 in the next few days (which I doubt). That's not advice, just my own individual value point.
    23 Apr 2012, 04:44 PM Reply Like
  • biobat
    , contributor
    Comments (3238) | Send Message
     
    Subscription guidance wasn't great - at least not domestically but it looks like Netflix is turning around from their losses faster than most would have anticipated. Subscribers be damned, if they turn profitable next quarter, the bull case may start up again.
    23 Apr 2012, 04:46 PM Reply Like
  • BadCop_NoDonuts
    , contributor
    Comments (482) | Send Message
     
    nobody wants to be a bagholder. Big drop before bargain hunters pick up the scraps. I'll cash out my puts near the bottom and buy some calls for the inevitable bounce (dead cat? sick puppy?)
    23 Apr 2012, 04:46 PM Reply Like
  • willfly4food
    , contributor
    Comments (82) | Send Message
     
    There are only so many earnings periods that the "free subs" can prop up the sub base. I think the story is well understood now by investors, and big houses. Time to sell, if you still are profitable, have to see if it is time to buy back the shorts, tomorrow will be interesting.
    23 Apr 2012, 04:50 PM Reply Like
  • decent_banker
    , contributor
    Comments (13) | Send Message
     
    Netflix reported 23.41 million domestic streaming subscribers, a gain of 1.74 million. Some analysts were expecting 24 million subscribers. While DVD business is losing big time to Coinstar/Redbox
    23 Apr 2012, 05:11 PM Reply Like
  • Andrew Shapiro
    , contributor
    Comments (1894) | Send Message
     
    Netflix's (NFLX) guidance for just 200K-800K Q2 domestic streaming net adds (blamed on "seasonality") falls below a Street estimate of 1.2M, and makes the company's guidance for 7M 2012 net adds look dubious.

     

    Also Netflix's Latin and U.K./Ireland ops will need more than 8 quarters to "reach sustained profits."

     

    Finally, contribution margins on DVD segment plummeted by 662 BPS and on much lower revenue, dropping segment profit by $47.6MM - even more than the Int'l streaming loss of $42.9MM. Given the much much higher margin (even after this margin decline) in DVD vs. streaming, it takes more than 3 streaming subscribers to replace every DVD subscriber that leaves. I wouldn't be surprised if NFLX raised prices on DVD subscribers before year end. NFLX is making it less hospitable for DVD subscribers by the day and a higher % of remaining base is leaving each quarter. No wonder CSTR has been gaining share.
    23 Apr 2012, 05:47 PM Reply Like
  • Andrew Shapiro
    , contributor
    Comments (1894) | Send Message
     
    From NFLX call going on right now -

     

    If Netflix enters new Int'l mkt in Q4 - they expect to give up any profitability regained in Q2-Q3 and generate small loss again in Q4/

     

    highlighted increased "seasonality" of net sub adds b/c of larger base - they fail to highlight that on higher base subscriber growth similar to 2010 implies far lower y/y growth rate too
    23 Apr 2012, 06:17 PM Reply Like
  • J Mintzmyer
    , contributor
    Comments (3674) | Send Message
     
    It's pretty ridiculous how they can spin this international expansion story. NFLX would be far better off if they had never left the US. I'd rather own RIM than NFLX (at today's market price). That's just me though- I think NFLX is near worthless. Sure the IP, sub-base, and overall name is worth probably $3-$4B, but the net liabilities are MORE than that! This ends in a stock worth $0.
    23 Apr 2012, 06:44 PM Reply Like
  • BigJ1260
    , contributor
    Comments (206) | Send Message
     
    Reed the Carnival Barker at work selling magic elixir again

     

    "Well, we would be profitable if not for all this exciting and continuous Intl. Expansion" - and don't look behind the curtains at the flat Domestic revenue and profit fcst we just gave for next qtr. even though our content costs this quarter are up 300% vs 2011 and 1700% vs 2010

     

    This story has been the same for 2 years now and is really about a simply unsustainable model of ballooning content costs coming home to roost off the balance sheet through amortization while domestic subs and revenue hit a ceiling at the same time.

     

    Consider these trends in $M Q1 2010 Q1 2011 Q1 2012
    Revenue $ 494 $719 $870
    Amortized Streaming Costs $19 $86 $340
    Net Income $32 $60 ($5)

     

    Nuff said
    You are crazy to invest in this fairy tale being spun by Reed et al
    23 Apr 2012, 07:33 PM Reply Like
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