PFE - Wall Street Breakfast Podcast: Netflix Soars On Record Subs Price Hikes

2023-10-19 06:45:44 ET

Summary

• Netflix reports best sub growth in years and confirms price increase.
• Devon Energy considers mergers with Marathon Oil and CrownRock.
• Pfizer will reportedly price COVID-19 drug Paxlovid at $1,390 per course on the commercial market.

Listen below or on the go on Apple Podcasts and Spotify

Netflix ( NFLX ) jumps as it reports best sub growth in years, new price hikes. (00:26) Devon Energy ( DVN ) reportedly studying possible deals with Marathon Oil (MRO), CrownRock. (02:24) Pfizer ( PFE ) to price Paxlovid at $1,390 per course on commercial market: report. (03:17)

This is an abridged transcript of the podcast.

Premarket Netflix (NASDAQ: NFLX ) is up more than 13%.

The company reported third-quarter results that met and topped financial expectations.

Netflix posted its best subscriber growth in years and confirmed a price increase.

The company added 8.76M global paid subscribers, topping consensus for adds of 6.2M, and landed at 247.15M memberships vs. expectations for 244.41M. The year-over-year growth rate hit 10.8%, stronger than Q2's 8.0% and Q1's 4.9%.

Revenue growth also accelerated, with sales growing 7.8% to $8.542B. Operating income rose to $1.916B and operating margin stretched to 22.4%.

Earnings per share of $3.73 also beat forecasts for $3.48.

Netflix attributed the better-than-expected subscriber growth to "the rollout of paid sharing, strong, steady programming and the ongoing expansion of streaming globally."

Meanwhile, it's moving forward with price increases in the U.S., UK and France. In the U.S., the Ads plan will remain at $6.99 per month and the Standard plan at $15.49 per month, while the Basic plan rises to $11.99/month, and the Premium plan to $22.99/month.

Tesla ( TSLA ) also reported earnings Wednesday after the closing bell. You can find a full analysis in the Wall Street Breakfast newsletter , our daily one page news summary. And separately Kim Khan is breaking down when TSLA turned negative on the earnings call. I’ll give you a hint…it has to do with a model that has been in the works for years.

Devon Energy (NYSE: DVN ) is considering major acquisition targets .

According to a Bloomberg report Wednesday, the company seeks to gain scale in U.S. shale, and has held preliminary talks in recent months about a combination with Marathon Oil (NYSE: MRO ).

The companies are complementary because both operate in a handful of basins in the midwestern U.S., Oklahoma, Texas and New Mexico.

Separately, Devon ( DVN ) has been looking at CrownRock LP, a Permian Basin producer, according to the report , which also said the closely-held company could fetch more than $10B in a sale.

Either Marathon Oil ( MRO ) or CrownRock would be Devon's ( DVN ) largest deal since its $2.6B takeover in 2021 of WPX Energy.

Premarket Marathon +2.2% and Devon -1.8% following the report.

Pfizer’s (NYSE: PFE ) COVID-19 drug Paxlovid will reportedly be priced at $1,390 per five day course when it becomes commercially available later this year.

This would be a steep increase from the $529 the drugmaker charged the US government for the treatment.

Health plans will likely pay substantially less for the drug, with Pfizer planning to subsidize commercial insurance co-pays at least through 2028, according to The Wall Street Journal.

Paxlovid will still be available for free to Medicaid recipients and the uninsured through 2028, while Medicare recipients will be entitled to free Paxlovid through 2024, the Journal added.

Last week, Pfizer lowered its 2023 forecast due largely to lower-than-expected sales of Paxlovid and its COVID-19 vaccine.

Pfizer closed 4.1% lower in Wednesday’s trading.

Other articles to look out for on Seeking Alpha:

Elon Musk: 'we dug out own grave' with Cybertruck; Tesla slumps premarket

Nestlé reports 9-month results; temporarily halts production in Israel

Nokia reports Q3 results, reaffirms FY23 guidance and announces 14,000 job cuts

J&J considers third bankruptcy attempt over talc claims

Disney breaks out ESPN figures for first time; channel made ~$16B revenue in fiscal 2022

On our catalyst watch for the day,

• Notable investor events include Hewlett Packard Enterprise's ( HPE ) Securities Analyst Meeting, Vista Outdoor's ( VSTO ) Investor Day, and Cytokinetics' ( CYTK ) Virtual Investor & Analyst Day.

U.S. stocks on Wednesday ended in the red, with the selling picking up pace in the final hour of trading.

An extended sell-off in bonds also weighed on equities, with the 10-year Treasury yield ( US10Y ) powering past the 4.90% level for the first time since 2007.

The Nasdaq ( COMP.IND ) retreated 1.62%. The S&P 500 ( SP500 ) slipped 1.34%, and the Dow ( DJI ) declined 0.98%.

Nine of the 11 S&P sectors ended in negative territory, led by Materials.

Energy and Consumer Staples were the two gainers, with the former adding around 1%.

The 10-year yield ( US10Y ) soared to a session high of 4.93% while the 2-year yield ( US2Y ) was flat at 5.22%.

Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are mixed. The Dow is down 0.1%, the S&P 500 is down 0.1% and the Nasdaq is up 0.1%. Crude oil is down 1.3% at more than $87 a barrel.

In the world markets, the FTSE 100 is down 0.8% and the DAX is down 0.2%.

The biggest movers for the day premarket: Las Vegas Sands (NYSE: LVS ) is up 6% after its top-line exceeded expectations in Q3 boosted by continued travel and tourism recovery in Macau and Singapore.

On today’s economic calendar,

• 12 pm Fed Chair Jerome Powell will speak on the economic outlook at the Economic Club of New York. We’re only two days ahead of a blackout period for Fed members. Analysts will be watching if the strong jobs and CPI data for September push Powell to make hawkish comments to support the expectation by many of higher rates for longer.

• 1:30pm the Fed’s Michael Barr is set to speak about Stress Testing at an event in Boston.

• 4pm the Fed’s Raphael Bostic will speak on the role of policy in addressing inequality at the New School in New York

For further details see: