LONDON, UK / ACCESSWIRE / October 18, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Netflix, Inc. (NASDAQ: NFLX), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=NFLX, following the Company's announcement of its third quarter fiscal 2017 operating results on October 16, 2017. The world's leading online video streaming service exceeded revenue and subscribers estimates, while its operating income soared 97%. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Earnings Reviewed

For the three months ended September 30, 2017, Netflix's revenue surged 30.3% to $2.99 billion compared to revenue of $2.29 billion in Q3 2016. The Company's revenue was slightly ahead of analysts' estimates of $2.97 billion.

During Q3 2017, Netflix's Global Streaming segment's revenue rose 33% to $2.88 billion on y-o-y basis, primarily driven by a 24% increase in average paid memberships, and a 7% growth in ASP. During Q3 2017, Netflix's Domestic contribution margin was 35.8% compared to 36.4% in Q3 2016, and was below the Company's forecasts of 37.1%, primarily due to the earlier-than-anticipated close of certain content deals. The foreign currency impact was +$13 million in the reported quarter. International revenue grew 54% on a y-o-y basis, excluding foreign currency impact, in the reported quarter. The Company's International contribution profit margin of 4.7% exceeded its 2.3% guidance, also due to the timing of content deals.

For Q3 2017, Netflix's operating income nearly doubled, surging 96.7% to $208.63 million on y-o-y basis compared to operating income of $106.04 million in Q3 2016. The Company posted global operating margin of 7.0%, putting the Company on track to achieve its full-year target of 7%.

Netflix reported net income of $129.6 million, or $0.29 per share, for Q3 2017, up from income of $51.5 million, or $0.12 per share, during Q3 2016. The Company's earnings per share (EPS) of $0.29 included a pre-tax $51 million non-cash loss from F/X remeasurement on its Euro bond. Netflix's earnings fell short of Wall Street's estimates of $0.87 per share.

Membership Details

During Q3 2017, Netflix added a Q3-record 5.3 million memberships across the globe, up 49% on a y-o-y basis, as the Company benefitted from strong appetite for its original series and films, as well as the adoption of internet entertainment across the world. In Q3 2017, Netflix's 5.3 million memberships comprised of 4.45 million in overseas markets and 850,000 in the United States. The Company's membership addition topped market estimates for subscribers addition of 4.5 million - 3.69 million internationally, and 810,000 in the United States. On a year-to-date basis, Netflix had net additions of 15.5 million, up 29% on a y-o-y basis.

For Q4 2017, Netflix is forecasting global net additions of 6.30 million, with 1.25 million subscribers expected in the US and 5.05 million internationally. The projected number is below the Company's 7.05 million net additions in Q4 2016, which was the Company's all-time high for quarterly net adds. Netflix recently announced price adjustments in many markets to its HD and 4K video plans while keeping the SD plan mostly unchanged.

Free Cash flow and Capital Structure

During Q3 2017, Netflix's free cash flow totaled negative $465 million versus negative $506 million in Q3 2016, and negative $608 million in Q2 2017. The Company re-affirmed its expectations for free cash flow in the range of negative $2.0 billion to negative $2.5 billion for FY17. The Company stated that the negative free cash flow, despite growing operating income, is due to a growth of its content spend, where Netflix pays for the titles before consumers enjoy the content, and the asset is amortized by estimated viewing over time. Netflix anticipates financing its capital needs in the debt market as the Company's after-tax cost of debt is lower than its cost of equity.

Stock Performance

At the closing bell, on Tuesday, October 17, 2017, Netflix's stock dropped 1.58%, ending the trading session at $199.48. A total volume of 23.85 million shares have exchanged hands, which was higher than the 3-month average volume of 7.68 million shares. The Company's stock price skyrocketed 8.50% in the last three months, 42.73% in the past six months, and 99.88% in the previous twelve months. Moreover, the stock soared 61.13% since the start of the year. The stock is trading at a PE ratio of 244.46 and currently has a market cap of $86.05 billion.

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