Earnings Preview Netflix & How To Trade It (NFLX, LVLT, AKAM)

Netflix, Inc. NFLX is going to report earnings tonight after the bell, and Wall Street will be looking to hear what the online DVD-rental and streaming company has to say about content costs, as many bears believe that content costs will catch up to the company, sooner rather than later. The company is expected to report first quarter earnings of $1.08 per share on revenues of $703.60 million. This is up from a year ago, when the company reported 59 cents per share on revenues of $493.66 million. The company is not cheap, trading at 84 times 2011 earnings, and it has a 1.89 price to earnings growth ratio. If Netflix is able to deliver solid results, and show that content costs are not eating away at profits, this could boost the content delivery networks (CDN), which help bring Netflix to your home or mobile device. Names like Akamai AKAM and Level 3 Communications, Inc. LVLT could see a bit of a boost on a strong reaction to Netflix's earnings. Netflix, Inc. provides online movie rental subscription services in the United States. The company offers its subscribers access to a library of movie, television, and other filmed entertainment titles on digital versatile disc (DVD). At last check, shares of Netflix were trading at $250.00, down $2.22 or 0.88% on 4.2 million shares today.