Friday preview: Netflix earnings in the spotlight

(Sharecast News) - Friday looks set to mark a quiet end to the week, with little in the way of macroeconomic or corporate news due. Scheduled for release after the close of US markets on Thursday, first-quarter earnings from Netflix are likely to be in focus in Europe.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said the streaming giant was heading into results with shares having rebounded after withdrawing from the race to buy Warner Bros.

"Discovery, shifting investor focus back to the organic growth story in 2026. Recent price hikes were largely anticipated and should keep revenue trending towards expectations, with a shot at beating them in the near term. But margin remains a separate question, especially with investment in content set to ramp up again.

"Engagement also appears to have stagnated somewhat, raising questions about how much incremental growth recent pricing actions can realistically unlock without reigniting churn. Investors will be keen to hear whether management sees scope for further large-scale acquisition activity on the horizon, or if the focus remains firmly on building out existing content pipelines."

Britzman said the results will "hopefully offer a steer on how management plans to balance growth ambitions with profitability from here".

Kathleen Brooks, research director at XTB, said analysts expect year-on-year earnings growth of 15% and revenues of about $12.05bn, with profits expected to be $2.55bn.

"Analysts are upbeat coming into this earnings report after it pulled out of the deal to buy Warner Bros earlier this year," she said.

"The outlook is of interest to the market as it could lay out what Netflix will do instead of acquiring Warner. Analysts expect Netflix to lay out a roadmap of content creation and acquisition, which is required to keep subscriber growth robust. More live entertainment, gaming and user content is also expected. There is also anticipation that Netflix may boost shareholder returns now that it won't be using free cash flow to buy Warner. Share buybacks and dividends are in focus.

"If Netflix fails to deliver on this then their share price may take a knock. It has outperformed the overall market during the Middle East conflict and is up 5%, however, its share price has fallen after its last three earnings reports."

Elsewhere, Swedish networking and communications company Ericsson is slated to report first-quarter numbers.