Netflix Earnings: Is an Earnings Beat on the Horizon?

With Netflix earnings due out today, here are the metrics and story lines investors will want to watch.

Jul 21, 2014 at 10:27AM

2014 has proven to be another stellar year for shareholders of online streaming powerhouse Netflix (NASDAQ:NFLX). The company's share performance has trounced the broad market indexes like the Nasdaq, as well as other rivals like (NASDAQ:AMZN).

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With Netflix earnings due out on after market close today, ahead of's report later in the week, the ongoing streaming wars between and Netflix will undoubtedly garner plenty of attention.

Netflix earnings: Time to get excited?
There's plenty of reason to believe that Netflix earnings could hold more positive news for investors. Even as it has continued a torrid international expansion, Netflix has also been able to grow its profits to an impressive degree during the past several years.

The key here is that Netflix typically incurs substantial up-front costs whenever it enters a new market, which results in early negative contribution margins, a key internal metric that Netflix uses to monitor the financial health of its operations in a given market. And as those up-front costs decline, and Netflix adds subscribers in a given geographic region, the contribution margins in new markets can switch from negative to positive in relatively short order.

Recently, analysts have postulated that this very scenario, in key international markets like Latin America and Europe, could help give Netflix an underappreciated financial tailwind for its upcoming report. In the video below, tech and telecom specialist Andrew Tonner also discusses what investors need to watch for in the ongoing rivalry between and Netflix when the latter releases its earnings.

How you can cash in on tech's next massive growth market
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Andrew Tonner owns shares of Apple. The Motley Fool recommends and owns shares of, Apple, and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

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This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

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The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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