Netflix earnings will test waters for tech giants after sell-off

Published on .

Credit: Netflix

Beleaguered technology investors are looking to Netflix to stop the bleeding.

The company's earnings are poised to be even more closely watched than usual on Tuesday after last week's market rout. Netflix is one of the first major U.S. companies to report third-quarter results -- and 2018's best-performing FAANG stock -- making it especially influential in the wake of a drubbing that hit the tech giants hard.

"Trends at Netflix, whether above or below expectations, will set the tone," MKM Partners analyst Rob Sanderson said in a note.

Netflix is also looking to redeem itself after missing subscriber estimates in the previous quarter, a whiff that sent the stock on its worst one-day tumble in two years. The shares haven't managed to climb back to a record set in July, but they remain up 77 percent for the year.

That's a better showing than the rest of the FAANG cohort, which includes Facebook, Amazon, Apple and Google owner Alphabet.

As always, the most important gauge of Netflix's performance is subscriber growth. Wall Street expects Netflix to have added about 5.1 million subscribers in the third quarter, based on the average of seven estimates compiled by Bloomberg News. That's 673,000 in the U.S. and 4.42 million internationally.

For the fourth quarter, analysts are anticipating 1.64 million net subscriber additions in the U.S. and 5.54 million internationally, based on five estimates.

-- Bloomberg News

Most Popular
In this article: