Amazon.com Earnings: What to Watch
April 26 2018 - 5:59AM
Dow Jones News
By Laura Stevens
Amazon.com Inc. is scheduled to announce its first-quarter
earnings after the market closes on Thursday. Here's what you need
to know:
EARNINGS FORECAST: Analysts polled by Thomson Reuters on average
expect Amazon to earn $1.26 a share, compared with $1.48 cents a
share a year ago. The company forecast an operating income range
between $300 million and $1 billion, compared with $1 billion a
year ago.
REVENUE FORECAST: Analysts on average project quarterly revenue
of $49.78 billion, compared with $35.71 billion a year ago. Amazon
said it expects sales of between $47.75 billion and $50.75 billion
for the quarter, which includes growth from its acquisition of
grocery-store chain Whole Foods.
WHAT TO WATCH:
-- MARGIN PRESSURE: Some analysts predict Amazon may back away
from its recent fiscal discipline this quarter as the company
continues to invest heavily in everything from more warehouses to
devices. Plus, the company rapidly added Prime Now grocery delivery
to its Whole Foods stores in the quarter -- expanded to a total of
10 markets as of this week. Those costs and others could prevent a
repeat of the company's blowout profits in the fourth quarter, when
the company for the first time earned more than $1 billion.
-- WHOLE FOODS: Analysts will be looking for an update on how
the companies' integration is progressing. Amazon has made some
initial changes, including dropping prices on some items, adding
in-store lockers and promising Prime member benefits. But it is
unclear exactly how the two companies are meshing, and a string of
Whole Foods executives have departed in recent months. Executives
may provide further clarity on the call.
-- CORE E-COMMERCE: Analysts expect strong performance in the
company's core retail business due to overall sales growth in U.S.
e-commerce during the quarter. SunTrust analysts said more than
half the units sold on Amazon last year came from outside sellers
for the first time, a trend that they expect will continue this
year and that will hurt revenue growth but help gross profit.
-- REGULATION: Amazon and its chief executive, Jeff Bezos, have
increasingly come under fire from President Trump in recent weeks.
A string of tweets accusing the company of avoiding sales taxes and
causing losses for the U.S. Postal Service was met by silence from
the company as stock prices plunged, although they have since
recovered. The first-quarter conference call could be a time to
address some of those issues.
Write to Laura Stevens at laura.stevens@wsj.com
(END) Dow Jones Newswires
April 26, 2018 05:44 ET (09:44 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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