Both on-demand media giant Netflix (NFLX) and global tech behemoth IBM (IBM) reported Q4 earnings, and both stocks are seeing a pop in after-market trading. Netflix posted earnings of 72 cents per share, easily beating the Zacks Consensus Estimate of 44 cents. IBM posted earnings per share (EPS) of $5.81, topping our estimate of $5.41. Yet both companies were a bit light on the top line.
Netflix narrowly missed revenue estimates by posting sales of $1.48 billion in the quarter. IBM fared worse, missing the Zacks consensus $24.65 billion and only reaching $24.11 billion. This also marks the 11th consecutive flat or declining revenue actual for IBM — meaning IBM hasn't shown sequential revenue growth since Q1 of 2012.
Analysts were eager to see Netflix's results in its international stream, and the good news provided by the company is what has initially spurred after-hours trading for Netflix up over 11 percent. Not only did the streaming entertainment company bring in 4.33 billion new international subscribers in Q4 — more than expected and higher than the 4.07 billion added in the year-ago quarter — but CEO Reed Hastings quipped in the company's Letter to Shareholders that Netflix will be "fully global by the end of 2016."
IBM has a long history with beating EPS estimates even when revenues disappoint. Its Q4 2014 produced sales more than 11 percent lower than Big Blue had in the year-ago quarter. After abandoning its 2015 guidance in IBM's conference call following its Q3 earnings report, investors will be looking for something hopeful that may turn around its revenue numbers sometime within the year. Otherwise we may see further troubles ahead for IBM, whose shares are down 17 percent year over year.
Both Netflix and IBM carried Zacks Rank #3 (Hold) before their earnings announcements. We will see in the coming days if analyst revisions put any upward or downward pressure on these companies.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment