Netflix subscriber rebound watched

Netflix has some convincing to do as heavy competition waits in the wings

Netflix has some convincing to do as heavy competition waits in the wings

Rivals are set to swarm over Netflix’s patch, though with Disney+, the new streaming entrant, launching on 12th November, the quarter was spared direct pressure from major competition. Netflix reports third quarter results tonight at 21.00 BST.

Meanwhile, a more impressive line-up than in Q2 should help streaming subscriber growth rebound, overall. International subscriber growth is forecast to accelerate by 24% year-on-year, or 6.92 million, but U.S. subscriber growth is seen declining by 21%, as the group is expected to report just 859,000 additional U.S. viewers.

Adjusted EPS forecast: +20.3% to $1.24. Revenue forecast: +31% to $5.25bn.

Netflix will not only have to exceed its guidance around 7 million subscriber additions but also deliver a healthy 4Q forecast to ease concerns that arose after weak 2Q results. Questions about the business model abound, given looming competition. A strong slate including "Stranger Things" should have helped subscriptions in 3Q, but investors will be most curious about how the company plans to fend off a new crop of rivals prepared to pour vast sums of money into content. Subscriber guidance for 4Q is critical, given the November launches of Apple TV+ and Disney+.


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