The 10-second takeaway
For the quarter ended March 31 (Q1), Netflix met expectations on revenues and exceeded expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share dropped to a loss.
Margins contracted across the board.
Netflix reported revenue of $869.8 million. The 27 analysts polled by S&P Capital IQ anticipated net sales of $866.6 million on the same basis. GAAP reported sales were 21% higher than the prior-year quarter's $718.6 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at -$0.08. The 23 earnings estimates compiled by S&P Capital IQ anticipated -$0.26 per share. GAAP EPS were -$0.08 for Q1 versus $1.11 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 28.3%, 1,070 basis points worse than the prior-year quarter. Operating margin was -0.2%, 1,440 basis points worse than the prior-year quarter. Net margin was -0.5%, 890 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $890.8 million. On the bottom line, the average EPS estimate is -$0.18.
Next year's average estimate for revenue is $3.63 billion. The average EPS estimate is -$0.31.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 7,690 members out of 9,478 rating the stock outperform, and 1,788 members rating it underperform. Among 2,704 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 2,426 give Netflix a green thumbs-up, and 278 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Netflix is hold, with an average price target of $94.58.
If you're invested in retailers like Netflix, you should check out the concept that is The Motley Fool's top stock for 2012. Its founder wrote the book on big-box retailing, and it's growing in increasingly important international markets. Click here for instant access to this free report.
- Add Netflix to My Watchlist.