What to expect when iQiyi (IQ) reports Q3 earnings?

iQiyi (NASDAQ: IQ), dubbed the Chinese Netflix, is slated to report third quarter 2019 earnings results on Wednesday, November 6, after the market closes. Analysts expect the company to report a loss of $0.72 per share. This compares to a loss of $0.63 per share reported in the year-ago period. Revenue is expected to grow by 2% to $1.02 billion.

iQiyi’s topline numbers could benefit from strength in content distribution and membership services in the third quarter. The company has been investing in original content and this strategy can help drive growth in revenues and subscribers. Last quarter, the company’s subscriber base grew to 100.5 million, of which nearly 99% were paid members.

Content distribution revenue declined by 4% in Q2 2019 but this was due to the delay of certain content launches in the quarter. The weakness in advertising is expected to continue, taking a toll on the results. The economic environment in China is also likely to impact the quarterly results.

Also see: Roku Q3 2019 Earnings Preview

In the second quarter of 2019, iQiyi reported a 15% increase in revenues to RMB 7.1 billion ($1 billion). Loss per share came in at RMB 3.22 ($0.49). Membership revenues rose 38% while online advertising services revenue fell 16%.

For the third quarter of 2019, iQiyi expects revenue to be between RMB 7.21 billion ($1.03 billion) and RMB 7.63 billion ($1.09 billion), representing a 4% to 10% growth from the third quarter of 2018.

Shares of iQiyi have gained 21% year-to-date and 9% in the past one month. The stock was up 1% in afternoon hours on Monday.

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