Netflix (NFLX) This fall 2020 earnings

By UMass Mag On Jan 19, 2021

(LR) Reed Hastings and Ted Sarandos attend the world premiere of the Netflix TV series “Marseille” at Palais du Pharo in Marseille on May 4, 2016 in Marseille, France.

Stephane Cardinale | Corbis | Getty Images

Netflix reported earnings for the fourth quarter of 2020 on Tuesday after Tuesday’s bell, announcing it was “very close” to positive free cash flow and considering share buybacks. A balanced cash flow is expected this year.

The stock rose about 11% after hours.

Here are the key numbers:

Earnings per share (EPS): $ 1.19 vs. According to Refinitiv analyst survey, $ 1.39 is expected
Revenue: Refinitiv expects $ 6.64 billion versus $ 6.626 billion
Globally paid net subscribers: According to StreetAccount, it is expected to be 8.5 million versus 6.47 million

According to StreetAccount, Netflix significantly outperformed estimates for net added subscribers worldwide, reporting 8.5 million versus an expected 6.47 million analysts. Netflix also beat sales estimates but fell short of earnings per share.

Netflix’s expectation of positive free cash flow soon would bring the bull case to life for the stock. Netflix said it would no longer need outside funding and would even look into returning cash to shareholders.

Netflix has not taken such a step since 2011, a pivotal year in the company’s transition from DVDs to streaming.

The company intends to pay off a larger portion of its debt as well. It has borne $ 15 billion since 2011 and currently has $ 8.2 billion in cash.

Netflix has had positive free cash flow for the past three quarters, though executives largely attributed this to it as a result of postponing production during the pandemic. Free cash flow for the fourth quarter was negative as expected as production resumed in some regions, but not as high as expected. Free cash flow for full year 2020 was + $ 1.9 billion compared to – $ 3.3 billion in 2019.

CNBC’s Alex Sherman contributed to this report.

This story evolves. Check for updates again.

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