Monday was a positive start to the week for U.S. equities as they bounced back despite tensions with North Korea. The S&P 500 Index, the Dow Jones industrial Average and the Nasdaq Composite each rose between 0.85% and 0.9% — a tight cluster for the major indices.
We’re starting to hit the meat of Q1 earnings season, which means quarterly reports are dominating the headlines. In the spotlight this morning are Netflix, Inc. (NASDAQ:NFLX), GNC Holdings Inc (NYSE:GNC) and Barracuda Networks Inc (NYSE:CUDA), which are all making moves following their latest releases.
Here’s what you need to know as we head into Tuesday:
Netflix Inc (NFLX)
NFLX has some good news and some bad news.
The good news is, the online streaming service beat earnings expectations for its first quarter, posting net income of 40 cents per share — three pennies better than the consensus estimate. The company also thinks Q2 is going to be a rousing win from a subscriber front, believing it will add 3.2 million net subscribers. That would nearly double the year-ago additions and push Netflix over the 100 million mark for the first time. (In fact, Netflix believes it will clear the 100 million mark this weekend.)
The bad news is that Q1 subscriber additions were well short of Wall Street expectations. NFLX added 1.42 million customers domestically, and 3.53 million on the international front, but Wall Street was estimating 1.5 million and 3.65 million, respectively. Netflix itself had set Q1 guidance of 1.5 million and 3.7 million adds, so it missed the mark on its own targets, too.
Analysts are pointing to a less-than-spectacular content lineup — including Iron Fist, a rare flop from Marvel — during the quarter for Netflix’s weak figures. Naturally, competition from Amazon.com, Inc. (NASDAQ:AMZN) and Hulu is getting a nod this morning, too.
Revenues of $2.64 billion were merely in line with expectations to boot — hardly a bullish sign.
NFLX stock is digesting the news well, however. Shares are up 1.5% in Tuesday’s early trade, adding onto the 3% rise shares tacked on entering Monday evening’s Q1 report.
GNC Holdings Inc (GNC)
Battered nutritional supplement retailer GNC Holdings is getting a big boost in Tuesday morning trade thanks to a Street-beating earnings report.
Net income of $23.9 million was off by more than half from the year-ago period’s $50.8 million, and revenues of $644.8 million were about 4% lower year-over-year. Still, the top line managed to beat a $623 million expectation, and adjusted earnings of 37 cents were also better than the consensus mark, by 3 cents.
GNC had some issues on the comps front, with same-store sales declining 3.9%, led lower by a 4.6% drop on the domestic front. Comps were better sequentially, however; Q4 2016’s same-store sales had declined 11.3%.
The company also plans on leveraging information from its 5 million myGNC Rewards Program members and 78,000 PRO Access members to “cost-effectively speak to its customers.”
GNC shares were popping by more than 20% in early Tuesday trade.
Barracuda Networks Inc (CUDA)
Barracuda Networks wasn’t so lucky, with CUDA shares off after its latest quarterly data.
You can’t fault CUDA too much, considering that the company beat on both the top and bottom lines. Fourth-quarter earnings of 19 cents per share beat expectations by 4 cents, and revenues of $89.3 million topped estimates of $88.41 million.
The company also produced growth in gross billings, which rose from $95.8 million a year ago to $103.2 million, as well as subscribers, which improved 15% to 321,000.
CEO BJ Jenkins also touted the company’s “highest free cash flow in our company’s history at $58.9 million.”
Still, CUDA shares were off 4% in Tuesday’s premarket trade.