In advance of announcing its second-quarter financial performance, Netflix has landed a huge TV property to help propel its global enterprise: Star Trek.
The Net video service on Monday announced an international streaming deal with CBS to run the new Star Trek series, expected to launch in January 2017, and the entire Star Trek TV catalog including the classic 1966-1969 series in 188 countries, excluding the U.S. and Canada.
In the U.S., CBS will debut the first episode in the new Star Trek series with all subsequent episodes playing on CBS All Access, the network's own subscription streaming service ($5.99). In Canada, the first episode will premiere CTV with the remaining episodes on Bell Media’s cable networks, Space (in English) and Z (in French), and then later exclusively on CraveTV, Bell Media’s streaming video-on-demand service.
By the end of 2016, Netflix will make available globally the complete catalog of the original Star Trek series, Star Trek: The Next Generation, Star Trek: Deep Space Nine,Star Trek: Voyager and Star Trek: Enterprise.
News of the deal comes as Netflix is set to report second quarter earnings after Monday's market closes. As usual, Wall Street is laser-focused on how many new subscribers the Net TV company has added in the U.S. and globally during the April-June period and its forecast for the current quarter.
Back in April, Netflix shares dropped 10% in aftermarket trading following the company's issuance of a lower-than expected subscriber forecast for the second quarter.
Since then, Netflix (NFLX) shares -- up 1.3% to $99.67 midday Monday -- have risen nearly 6%. However, shares are down 13% for the year.
Here's what to watch for in Netflix's earnings report:
EARNINGS FORECAST: Netflix had forecast earnings of 2 cents, compared to 6 cents the same period a year ago, with net income of $9 million, compared to $26 million in the same period a year ago. That is in line with expectations from analysts polled by S&P Global Market Intelligence, which also expect 2 cents on earnings of $9.7 million -- a bit higher than Netflix’s forecast of $9 million.
REVENUE FORECAST: Analysts expect Netflix total revenue of $2.2 billion, a 31% increase over the same period a year ago. The company’s total streaming revenue forecast targets a 33% increase to $1.96 billion.
SUBSCRIBER GROWTH: Netflix has tempered expectations with its lowest growth forecast in a year of 2.5 million new subscribers expected in the second quarter. That breaks down to 500,000 U.S. and 2 million new international subscribers. Wall Street analysts have differing opinions with many expecting higher numbers of U.S. subscribers than the company forecasted.
Guggenheim Securities Equity Research analyst Michael Morris thinks that Netflix offers domestic and international upsides. Here in the U.S., Netflix will continue to capture viewership from traditional broadcast and cable networks, he says, in part because the streaming service is a better value.
Netflix's global launch, Morris says, is coinciding with slowing economic growth internationally. "My hope is the company has set some reasonable expectations for the near-term trajectory," he said, "but over time they are going to be able to make very good decision in each of those countries and be a compelling proposition globally."