NetFlix Earnings Highlights for Q3-2023

Following its earnings report, Netflix experienced a significant increase of over 13% in its stock shares. Netflix disclosed an impressive boost in its subscriber count during the quarter, surpassing Wall Street's projections by adding 8.76 million global subscribers. The surge in subscribers was attributed to Netflix's actions to combat password sharing and the launch of a new subscription tier supported by advertisements.

Netflix's earnings per share (EPS) stood at $3.73, surpassing the expected $3.49 per share. The company's revenue for the quarter amounted to $8.54 billion, aligning with the projected figure. Netflix's total membership count reached 247.15 million, exceeding the estimated 243.88 million.

The ad-supported subscription plan witnessed a nearly 70% increase in subscribers during the quarter. However, the specific percentage of subscribers in this plan was not disclosed. Disclosed pricing:

• Netflix's ad-supported tier will remain at $6.99 per month in the United States. 
• Basic plan's monthly fee increased to $11.99 (from $9.99)
• Premium plan's monthly fee increased $22.99 (from $19.99)
• Standard plan's rate remained unchanged at $15.49 per month.

Netflix faces higher production costs as part of its recent agreement with the Alliance of Motion Picture and Television Producers (AMPTP), which entailed increased wages and monetary benefits linked to streaming popularity. The company's executives remain dedicated to reaching an agreement with striking actors, despite recent setbacks in negotiations.

The company anticipates an 11% revenue increase in the fourth quarter, reaching $8.69 billion, slightly below the Wall Street's projected figure of $8.77 billion. The company expects that net subscriber additions will be in line with the third quarter.

Netflix acknowledged the impact of the strong U.S. dollar in recent months, which is anticipated to result in an approximately $200 million decline in fourth-quarter revenue. The company raised its full-year 2023 operating margin projection at 20%, Forecasted operating margins for 2024 were 22% to 23%.

Netflix also expressed its intent to make significant changes in its compensation model in 2024, transitioning to a more conventional framework based on performance.

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The Market Report 10-17-2023

The Market Report 10-17-2023

Stocks closed mostly flat on Tuesday, with the Dow Jones Industrial Average gaining about 13 points (0.04%) to close at 33,997. The S&P 500 was down 0.01%, while the Nasdaq Composite fell 0.25%.

Stronger-than-expected September retail sales data caused bond yields to surge, with the 10-year U.S. Treasury note reaching its highest level since October 6 at 4.847%. 2-year Treasury notes hit a 17 year high of 5.20%

The U.S. announced plans to tighten restrictions on AI chip exports to China, leading to declines in chip stocks like Nvidia and Advanced Micro Devices (AMD).

Several individual companies faced after-hours trading declines, with United Airlines dropping nearly 5% after issuing guidance for adjusted earnings per share (EPS) in the range of $1.50 to $1.80, below the expected $2.06. For the third-quarter the airlines adjusted earnings per share was $3.65 vs $3.35 expected and total revenue of $14.48 billion vs. an expected $14.44 billion.

Interactive Brokers Group's stock price declined by more than 4% in after-hours trading despite Q3 adjusted EPS of $1.55, surpassing the $1.51 average analyst estimate and Adjusted net revenue of $1.14B, vs. $1.11B expected

J.B. Hunt Transport Services saw a 3.6% decrease in its shares after reporting third-quarter results that fell short of Wall Street's expectations. EPS was reported at $1.80, missing analyst estimates of $1.85. Revenue for the quarter came in at $3.16B versus the consensus estimate of $3.18B.

Omnicom Group Inc. (OMC) on Tuesday reported third-quarter profit of $371.9 million and earnings per share of $1.86, beating Wall Street expectations of $1.85 per share. Revenue was $3.58 billion vs $3.57 billion expected. Despite the earnings beat the stock traded down after hours 1.36%

Earnings Season:

During this earnings season, 83% of companies have exceeded earnings expectations, with about 70% surpassing sales estimates, according to FactSet data

Upcoming earnings reports from companies like Morgan Stanley, Procter & Gamble, Travelers, Netflix, and Tesla are highly anticipated.

Economic Data

On the economic front, Wall Street awaits housing starts and building permits data for September.