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Earnings Watch: Will A Weaker Dollar Boost Netflix?

Summary

International companies like Netflix have fought US Dollar headwinds for several quarters.

With the US Dollar subsiding in Q1, operating incomes could benefit.

Netflix reports earnings in two weeks and we should get a glimpse of this trend.

Estimates for the S&P this earnings season are pointing to roughly 7% decline year-over-year. This "earnings recession" has hit topline revenue growth, but a strong headwind cited by many managers over the last few quarters, the strong dollar, should be subsiding. The dollar's first quarter has shown signs that the currency is slowing down its hot growth, which can be a good thing for international companies like Netflix (NASDAQ:NFLX).

In two weeks, Netflix announces its earnings for the most recent quarter. On the last earnings call, management at Netflix (which is now available in 130 countries globally) pointed a finger at the foreign exchange problem when looking at operating losses abroad. CFO David Wells explained:

I mean we continue to have an environment where we're running deep into some pretty headwinds of foreign exchange, if that continues that might challenge that 120 million upward a little again 10-20 million

Indeed, in the most recent Q4 a>


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