• Netflix investors were warned by the streaming giant that subscriber losses could amount to about 2 million during the second quarter.
• The question remains how Netflix will guide for the second half of the year.
• The company is working on a cheaper, ad-supported plan that could aid in boosting sub numbers alongside a packed slate of content.

Netflix investors already know to expect bad news when the company reports its second-quarter results Tuesday. Now they'll be looking for guidance on what to expect for the second half of the year.

The streaming service's executives warned in April that subscriber losses could amount to about 2 million during the second quarter, after slipping by 200,000 during the first three months of the year. At the time, Netflix blamed factors including intensifying competition, password sharing and inflation for the slip in subscribers.

When Netflix reports after the bell on Tuesday, another forecast of subscriber losses for the third and fourth quarters could send the company's stock spiraling.

Ahead of earnings, analysts on average are forecasting 1.8 million net new subscriber additions during the third quarter, according to Street Account. The company declined to provide full-year guidance last quarter, but noted that it has a stronger slate of content releases for the back half of 2022. It also said that price increases, which may have led some customers to leave earlier this year, would be less of a churn factor.

The company has around 222 million subscribers globally.

As for the second quarter, analysts are split on whether subscriber losses will be better or worse than Netflix predicted. Some expect the company to lose as many as 4 million subscribers, while others foresee a loss of 1.5 million.

"I do think the 2 million is conservative," said Michael Pachter, analyst at Wedbush. "I know they try to be conservative, and generally don't miss by much, so if it's worse, I'd be surprised."

Pachter and other analysts who expect smaller subscriber losses have pointed to the streaming service's popular series "Stranger Things." The fourth season of the show was released in two parts, one at the end of the second quarter and one at the beginning of the third. Some analysts expect the split may have limited churn or even driven new subscribers to sign up or to return.

"The sooner Netflix can show Wall Street they are releasing new content across multiple quarters, like they did with 'Stranger Things' Season 4, and highlight the efforts they are making to reduce churn, we will see more interest from investors looking at the possibility for net new subscribers," said Dan Rayburn, a media and streaming analyst.

A cheaper ad-supported subscription plan is also in the works and could lure back lapsed customers or encourage new users. No date has been set for the rollout of the option, but more information about its development Tuesday could boost investor confidence. Netflix's standard plan in the U.S. costs $15.49 a month, making it pricier than other major streaming services.

Netflix also has plenty of titles arriving before year-end that could attract subscribers. In the third quarter, subscribers will have access to the big budget action movie "The Gray Man," the first season of "Sandman," Jamie Foxx's vampire flick "Day Shift," as well as a comedy called "Me Time" starring Mark Wahlberg and Kevin Hart.

Also on the way are the fifth season of "Cobra Kai," several romantic comedies and some children's titles including "My Little Pony: Make Your Mark" and Roald Dahl's "Matilda: The Musical."

"I expect they will guide to a gain in Q3," Pachter said. "The consensus is 1.81 million new subscribers for Q3, notwithstanding the fact that half of the analysts covering downgraded the stock. Most are hedging their bets, and I think a guide to a return to subscriber growth will be positively received.