Netflix Faces Q3 Earnings Test as Stock Sheds 20% This Year

Netflix (NFLX) reports third-quarter results after markets close Tuesday, a critical test for a stock that has fallen about 20% this year amid investor concerns over engagement and revenue trends. The streaming giant is expected to post revenue of $12.88 billion, up 12% year-over-year, and earnings of 82 cents per share, up from 59 cents a year ago. Shares slid to a two-year low after July's report, which included a disappointing revenue forecast, and have lost more than 40% of their value over the past year. Last week Netflix cut 6% of its staff, just under 1,000 employees. Wall Street remains broadly bullish, with a mean price target above $90 versus Monday's close near $70. Gabelli Funds portfolio manager John Belton called Netflix an "unloved stock," citing soft engagement, decelerating revenue growth, slower margin expansion and recent content leadership changes.