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Netflix will probably post gain in 1Q earnings per share on international growth

Streaming media company has been targeting international growth amid competition at home
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The streaming giant in January forecast 6.35 million net subscriber additions for the quarter

Netflix Inc. (NASDAQ:NFLX) will probably report a 58% gain in earnings per share in the first quarter, helped by the video-streaming giant’s international subscriber growth.

Net income per share will probably rise to US$0.63 from US$0.40 in the year-earlier quarter, according to estimates from Zacks and FactSet. The company reports earnings results after the market close.

The company in January forecast 6.35 million net subscriber additions for the first quarter, with 1.45 million from the US and 4.9 million internationally. Investors also will be focused on Netflix net subscriber additions, as well as the firm’s operating margins, which it expects to increase as much as 10%.

Netflix has changed the industry in a “profound way,” giving it a “significant” lead and making it difficult for traditional media companies to catch up, cited Deutche Bank analyst Bryan Kraft as saying. Kraft increased his rating to Buy from Hold and raised his price target for the stock to US$350 from US$240, it said.

Netflix has been focused on garnering more international customers as US subscriber growth slows amid more fierce competition from services including Hulu and Alphabet Inc.'s (NASDAQ:GOOG) YouTube.

The California-based company has said its investment into original programming in recent years is paying off, culminating in a record 8.3 million subscribers being added in the three months to the end of December.

Viewers were drawn in by new seasons of shows including The Crown and Stranger Things – with the latter cementing its place as a “global phenomenon” following the release of its second series.

The company beat analyst expectations for subscriber growth in the fourth quarter, adding more than 8 million users, compared with expectations of 6 million, according to FactSet.

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