Netflix's Subscriber Growth Is Key

Netflix Inc. (NASDAQ:NFLX) is scheduled to report its financial results for the fourth quarter after the market closes Tuesday. Here's what you need to know.

--EARNINGS FORECAST:Profit of 45 cents a share is the median of estimates compiled by Thomson Reuters, compared to 79 cents a share in the year-ago quarter.

--REVENUE FORECAST:Wall Street analysts expect revenue of $1.49 billion, up from $1.18 billion.

--SHARE PRICE:Netflix shares are up 3.8% from a year ago, trading recently at $342.65, but the stock can be volatile and has traded between $299.50 and $489.29 over the past year. After its last earnings report, the company's stock fell 19% amid concerns about slowing subscriber growth. WHAT TO WATCH

--DOMESTIC SUBSCRIBERS:A key metric for Netflix will be whether its number of paid domestic subscriber additions in the fourth quarter will be above or below the company's guidance of 1.35 million. Overall, the company is projecting 1.85 million domestic streaming additions. "Another miss in domestic subs would elevate concern on saturation," MKM Partners analyst Rob Sanderson says. Netflix reported a disappointing number of new streaming subscribers in the third quarter, raising worries about the company's growth rate.

--OVERSEAS EXPANSION:Overseas subscriber growth is expected to continue to outpace its domestic business. Cantor Fitzgerald analyst Youssef Squali says, "International growth should be driven by the expansion into France, Germany, and Benelux (September), the Netherlands (launched in late "13), and continued progress in the Nordics (launched in October "12), as well as further progress in Latin America (2011)." Still, Netflix has struggled at times overseas, other analysts have said, and expectations may be too high.

--ORIGINAL PROGRAMMING:Netflix is scheduled to launch 20 originals this year, twice the number in 2013 and 2014, according to Cowen & Co. analyst John Blackledge. "The increasing velocity of originals brings with it higher usage and a stickier service," the analyst says. However, more original programming also increases the company's costs, which could pressure margins, especially if subscriber growth slows.