Netflix earnings — What you need to know in markets on Tuesday

What a difference a weekend makes.

After three chaotic trading sessions to finish last week, stocks on Monday finished lower but markets did not see the volatility that roiled markets a week ago, with the first trading day of the week more subdued to start a busy week of corporate earnings.

On Tuesday, investors will get the most anticipated earnings report of the week when Netflix (NFLX) releases its results for the third quarter after the market close.

This report will be closely watched after the company missed on second quarter earnings, sending shares down sharply, while reporting fewer subscriber additions than expected. Analysts expect Netflix to report adjusted earnings per share of $0.81 on revenue of $4 billion for the third quarter, according to estimates from Bloomberg. Netflix said in its second quarter letter to shareholders that it expects to add 5 million subscribers in the third quarter, down from 5.3 million adds in the same quarter last year.

“A second straight subscriber miss would likely be taken very negatively by the Street, and we would expect a more protracted decline in the share price than we saw in seasonally-weak Q2,” analysts at Macquarie said in a note to clients last week.

“But a strong slate of releases in Q3 like Ozark S2, Orange is the New Black S6, Maniac S1, and Bojack Horseman S5 should have bolstered subs and reduced churn. Consensus is also fairly close to guidance this quarter after Q2 saw estimates far exceed guidance. We think this makes for a potentially easier beat.” Wall Street is looking for subscriber adds of around 5.32 million, according to FactSet data compiled by UBS.

Cast member Jason Bateman and his wife Amanda Anka pose at a premiere for the season 2 of the television series “Ozark” in Los Angeles, California, U.S., August 23, 2018. REUTERS/Mario Anzuoni

Other notable companies set to report on Tuesday should include Morgan Stanley (MS), Goldman Sachs (GS), United Airlines (UAL), Johnson & Johnson (JNJ), BlackRock (BLK), and IBM (IBM).

And on the earnings side, investors will get the September readings on industrial production and capacity utilization from the Federal Reserve. The August report on job openings and labor turnover will also be released, giving investors a sense of how much slack remains in the labor as job openings have exceeded the number of hires made in recent months.

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Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland

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