Connect with us

Business

Second Covid wave will boost all streamers but Netflix may yet reign supreme | Netflix

Published

on

When Netflix reports its latest quarterly results this week, all eyes will be on whether the great coronavirus streaming boom has come to an end.

The world’s largest streaming service, which has an outside chance of breaking the 200 million subscriber mark in its third-quarter update on Tuesday, has been one of the big winners of the pandemic. Rolling lockdowns followed by ongoing social restrictions have kept millions at home seeking entertainment, which has fuelled a boom in the numbers clicking the subscribe button.

Netflix has added 26 million new sign-ups in the first half of this year, compared with 12 million in the same period last year and 27.8 million for the whole of 2019. Investors have rushed in, driving Netflix’s shares up 90% over the past year, giving the business a market value of $239bn, currently about $10bn more than Disney, the world’s biggest entertainment company.

But Netflix reckons the stratospheric rate of sign-ups is over, for now at least. The company’s share price took a hit in July after it forecast just 2.5 million new subscribers for the third quarter, with management arguing a slowdown was ahead because the pandemic had simply brought forward new subscribers it would have expected to join later this year. Yet many on Wall Street expect Netflix – a master of the underpromise, overdeliver forecast – to put on more than double its prediction as the second wave continues to restrict competing entertainment options such as going to the cinema.

“We expect Netflix to report third-quarter results well above guidance and consensus expectations,” said Goldman Sachs analyst Heath Terry in a note to investors.

Terry is forecasting about 6 million new Netflix subscribers. “[This is] driven by growth in content on the platform, a lack of competition for entertainment hours and spend, and more time being spent at home. Management is likely to continue to guide conservatively given its outperformance earlier in the year and the massive uncertainty of the current environment.”

However, a wider threat is the rise of competing streaming services, most notably Disney+, which has amassed about 60 million subscribers in less than a year.

Disney’s service is rolling out in more countries and, with cinemas shut or on limited hours and struggling for new films, the company has seized the opportunity to move big-screen blockbusters to its streaming service to drive subscriptions. Mulan was made available in August, for an additional fee of £19.99, with Pixar’s Soul set to follow at Christmas.

Analysts do not expect Disney, which last week reorganised its operations to prioritise streaming, to start going straight to streaming and digital release for all of its blockbusters when the cinema industry eventually recovers. This means Netflix remains the king of content, spending an estimated $17bn making and licensing TV shows and films this year and as much as $26bn by 2026, according to BMO Capital Markets.

“The competition is certainly heating up,” said Richard Broughton, analyst at Ampere. “But if I were Netflix I wouldn’t be too concerned by some of the moves Disney is making right now. Disney doesn’t have anywhere near the volume of content Netflix does, so it is unlikely to be eating significantly into the time subscribers are spending on its service.”

However, Broughton thinks the rise of well-funded rivals – from WarnerMedia’s HBO Max to NBCUniversal’s Peacock – as well as Amazon’s continuing effort to build Prime Video globally, will eventually put pressure on Netflix as consumers are forced to choose between streamers. “This time next year, there will be a significant number of strong services,” he said. “A time will come when consumers hit a crunch point, with their wallets being stretched by all these different services.”

As the battle for subscribers intensifies, analysts will be keenly observing the impact of Netflix’s move last week to drop its sign-up carrot of a free month’s trial in the US and UK – to stop super-bingers watching and then cancelling without paying a penny. It was replaced with a 50% discount for the first two months.

The pandemic subscriber rush may be over, but the fight for global streaming supremacy shows no sign of slowing down.


Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Eli Lilly CEO Dave Ricks still confident in Covid antibody treatment

Published

on

By

Eli Lilly Chairman and CEO Dave Ricks told CNBC on Tuesday that he believes the company’s coronavirus antibody treatment will still be beneficial to Covid-19 patients, despite the recent end to a study of the drug in a hospital setting.

The government-run clinical trial that was stopped looked at whether the antibody treatment helped people who are hospitalized with coronavirus. In a statement Monday, Eli Lilly said that data so far from the study indicated the drug was “unlikely” to help patients recover from the advanced stage of the disease.

“These are patients who had symptoms many, many days ago. They advanced in the hospital. Many were on supplemental oxygen,” Ricks said on “Squawk Box.” “It’s disappointing, of course. We would have liked to have shown a benefit in the hospital. It doesn’t appear that that benefit is there, so this chapter of that study will close.”

Other studies involving Eli Lilly’s antibody treatment are continuing to move forward, including another one sponsored by the National Institutes of Health that involves recently diagnosed Covid-19 patients who have mild to moderate cases of the disease. Lilly also is running a trial to see if the antibody treatment is effective on a preventative basis for residents and staff at nursing homes.

Earlier this month, Eli Lilly submitted an emergency use application to regulators at the U.S. Food and Drug Administration for its single antibody treatment, specifically for it to be used on mild-to-moderate Covid-19 patients who are at higher risk of death, such as those above age 65. The pharmaceutical company also said it hopes to submit an emergency use application in November for its combination treatment that uses two antibodies.

The company has so far seen “strong results” from the antibody studies that involve patients who are earlier in their Covid-19 diagnoses, Ricks said. “Catching the disease early, where you can reduce the viral load with an antibody, appears to be making a significant difference.”

Eli Lilly is among a handful of other companies developing coronavirus antibody drugs, which experts have viewed as a promising potential Covid-19 treatment. The goal of this class of drugs is to boost the immune system’s defenses and prevent the virus from infecting human cells.

President Donald Trump received an antibody cocktail from Regeneron Pharmaceuticals after he was diagnosed with Covid-19 in early October. Regeneron also has filed for emergency use authorization with the FDA.

Ricks said that Covid-19 has proved to be a “two-phase disease,” which can help explain why the antibody treatment doesn’t appear to provide a benefit to hospitalized patients.

“You have the initial phase, which is characterized by significant viral replication and the effects of that on your body causing symptoms.,” he said. “Then the second phase where, unfortunately, people develop their own immune storm, which causes organs to shut down and you end up in the hospital.”

By the time a patient ends up in the hospital, Ricks said, there may “not be enough viral load left to reduce” with an antibody treatment. “Instead, we might want to use anti-inflammatory drugs like steroids or our own Olumiant, which has proven [effective] in this setting,” he said. Olumiant is used to treat rheumatoid arthritis, which is a chronic inflammatory disorder.

Shares of Eli Lilly fell almost 5% early Tuesday as investors digested both the end of the hospital study and the company’s quarterly results. Adjusted per-share earnings of $1.54 missed Wall Street expectations by 17 cents, while revenue of $5.74 billion also fell short of estimates.

Eli Lilly saw weakness in its diabetes drug Trulicity, driven by higher-than-expected rebate filings and more sales into Medicaid, according to Ricks. He also noted the company’s $125 million in spending on accelerating coronavirus treatments also weighed on earnings. “That was never in our guidance,” he said.


Source link

Continue Reading

Business

5 things to know before the stock market opens October 27, 2020

Published

on

By

Continue Reading

Business

Restaurant Brands International (QSR) Q3 2020 earnings top estimates

Published

on

By

Jose Cil, CEO of Restaurant Brands International, speaks during an interview with CNBC on the floor at the New York Stock Exchange, November 6, 2019.

Brendan McDermid | Reuters

Restaurant Brands International on Tuesday reported that its quarterly revenue fell 8% as Burger King and Tim Hortons sales struggled to bounce back from the coronavirus pandemic.

Popeyes, however, once again reported double-digit same-store sales growth, thanks to the enduring popularity of its chicken sandwich.

Shares of the company, which had released preliminary same-store sales results earlier this month, were unchanged in premarket trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: 68 cents, adjusted, vs. 63 cents expected
  • Revenue: $1.34 billion vs. $1.34 billion expected

The restaurant company reported fiscal third-quarter net income of $145 million, or 47 cents per share, down from $201 million, or 75 cents per share, a year earlier. Temporary restaurant closures and other costs related to the pandemic weighed on profits.

Excluding corporate restructuring fees and other items, Restaurant Brands earned 68 cents per share, topping the 63 cents per share expected by analysts surveyed by Refinitiv.

Net sales dropped 8% to $1.34 billion, matching expectations. Burger King reported same-store sales declines of 7%, while Tim Hortons same-store sales fell by 12.5%. The Canadian coffee chain typically accounts for more than half of Restaurant Brands’ revenue. The pandemic not only disrupted coffee drinkers’ normal routines, but also hindered efforts to revitalize Tims’ sales.

Popeyes, the only chain to report positive same-store sales growth, saw sales at restaurants open at least 17 months grow 17.4% in the quarter. Even with its recent success, the fried chicken chain accounts for only a tenth of Restaurant Brands’ net sales.

Restaurant Brands said that it expects to see a continued impact from the pandemic on its fourth-quarter results.

Despite the sales downturn, the company is still investing in its restaurants. Restaurant Brands announced plans to revamp thousands of its drive-thru lanes across its three brands, starting with 10,000 Burger King and Tim Hortons locations. Contactless payment methods and digital menu boards that change display options based on weather, previous orders and other factors are among the changes.

Read the full earnings report here.


Source link

Continue Reading

Breaking News

Shares