Investors are eagerly awaiting Netflix’s second quarter results set to be handed down on Wednesday, July 19, to understand the impact of the streaming giant's crackdown on password sharing on its revenue for the period.
Netflix widely launched its “paid sharing” option in countries including the United States and the United Kingdom in May, which required users who live in different households to have their own subscription to the film and television streaming platform.
An estimated 100 million households were sharing accounts between different locations so the crackdown is expected to drive significant additional revenue for Netflix.
However, the company noted in its first quarter earnings report in April that with the delayed launch of paid sharing in 2Q instead of 1Q that some of the expected revenue benefit and membership growth would fall in 3Q instead of 2Q.
Analysts, on average, expect Netflix to post earnings per share (EPS) of $2.82 on revenue of $8.26 billion for the second quarter, according to Zacks Consensus Estimate.
This compares to EPS of $3.20 and revenue of $7.97 billion in the same quarter last year.
Netflix in April forecast 2Q EPS of $2.84. It expects revenue of $8.24 billion, which marks a 3.4% increase year-over-year.
It also expects to report an operating income of $1.6 billion, which is roughly flat year-over-year, and an operating margin of 19%, compared to 20% in the year-ago quarter.
- Updated with revised EPS estimate, share price movement -
Contact the author at emily.jarvie@proactiveinvestors.com
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