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WHAT TO EXPECT FROM AMAZON’S FIRST QUARTER EARNINGS

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WHAT TO EXPECT FROM AMAZON’S FIRST QUARTER EARNINGS

April 22 2015, 07.10am GMT

STOCK.com

Amazon.com is set to release its 1st quarter earnings on Thursday after the market closes. Here’s what analysts expect from this online marketplace giant.

Amazon.com Inc. (AMZN, +0.43%), is expected to report first quarter earnings on Thursday, after the market closes. This company, which makes its money from Amazon Prime subscriptions as well as its cloud and marketplace services, will be closely watched in this earnings report as it will be the first time that Amazon will releases its cloud services revenue. The company claimed in January that it has over one million active users on the Amazon web services.

Michael Pachter, an analyst from Wedbush, said in a note to his clients that he anticipates a strong growth in revenue out of Amazon this quarter; however down from profits last year. He also gave a neutral rating and increased his price target from $330 to $395.

Meanwhile, Colin Sebastian, an analyst from Baird, said that his expectations are that Amazon will report ‘generally in-line results’, while Youssef Squali, an analyst from Cantor Fitzgerald, said that healthy US growth would most likely offset the softer international-trends. Fitzgerald also went on to warn that “razor-thin” operating margins will continue through 2015.

Amazon on Tuesday was downgraded to hold by BGC Partners who stated that Amazon’s shares have overtaken expectations since 21 January when the brokerage upgraded the company. Colin Gillis, an analyst from BGC, also went ahead and reduced his estimates for this quarter based on the impact of a stronger U.S. dollar (USD).

FactSet sell-side analysts set an expectation of a 16 cent GAAP loss per share from a 23 cent profit per share at the same time in the previous year. They also see a 30 percent year-over-year decline with an EPS of 63 cents from a non-GAAP earnings per share of 92 cents the year before. According to Etimize, Amazon is expected to see a 5 cent earnings per share. Non-GAAP estimates for the company fell short 5 out of the last eight quarters. But, in January, earnings made the 45 cents mark which was higher than the expected 23 cents.

Revenues are estimated at $22.4 billion according to Wall Street consensus; this is an improvement of 14% year-over-year from $19.7 billion last year according to FactSet. Estimize contributors forecast a slightly increased revenue to $22.61 billion. However, $20.9 billion to $22.9 billion is the range estimated by Amazon management.

Interesting to note that in its last two quarters, Amazon has missed its revenue expectations. In the last three months Amazon have seen a 32% increase in its share price, since the last time they reported their earnings, which before that saw a six month decline in earnings. On Monday shares were $391 indicating a 0.4% growth.

MT4 Chart: Aamazon

Amazon on STOCK.com

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