Netflix’s earnings sparks big excitement

High reportings have investors giddy as results for tech firms turn sour

SAN FRANCISCO— If there’s anything left with the potential to cheer up technology investors, it’s an earnings report from Netflix.

Through an onslaught of market swoons, privacy scandals and antitrust threats, the television and movie service has stood unscathed. More than that: the stock just had its best quarter since 2015, while companies such as Alphabet and Facebook lost ground.

Netflix is the first tech megacap to report earnings — and it comes at a critical time. After four sell-offs of 3 per cent or more this year, the S&P 500 Information Technology Index is trading just above the halfway mark between the March 12 record and the 2018 low on Feb. 8. Alphabet and Facebook, which report on April 23 and April 25, are both in the red for the year. Apple reports on May 1 and has gained less than 3 per cent.

Enter Netflix, which has shot up faster than analysts can raise their price targets. The stock has added more than $50 billion (U.S.) in market value in 2018 and traded above the average price forecast for most of the past three months, according to data compiled by Bloomberg. The average estimate for Netflix’s first quarter revenue has increased by about $163 million to $3.69 billion after a blowout fourth quarter in January, according to Bloomberg data. Higher expectations combined with recent stock gains leave little room for error for Netflix, which is the secondbest performing stock in the S&P 500 this year.