The online e-commerce behemoth Amazon (
) reported impressive Q1 results after the market closed yesterday.
The company beat our estimates on both the top and the bottom line,
cheering investors' mood.
Earnings per share came in at 23 cents, a penny ahead of the Zacks
Consensus Estimate and 28% higher than the year-ago earnings.
Revenues climbed 23% year over year to $19.74 billion, surpassing
the Zacks Consensus Estimate of $19.48 billion (read:
Technology ETFs: Pain or Gain Ahead?
Robust performances were credited to new products, cloud computing
offerings and overseas expansion. Additionally, the company's video
strategy is paying off as video streaming on Prime Instant Video
nearly tripled year over year. Further, the successful launch of
Fire TV, a subsequent content deal made with HBO, is gaining
increased traction from many new partners, including Netflix (
), HBO Go, Hulu Plus, Crackle and Showtime Anytime.
For the current quarter, the company projects revenue to grow
15-26% to $18.1 billion to $19.8 billion. The midpoint is above our
current estimate of $19.12 billion, suggesting optimism in the AMZN
growth story. It also expects an operating loss between $55 million
and $455 million in the second quarter compared with operating
income of $79 million last year.
Following the earnings announcement, the shares of AMZN rose as
much as 2% in after hour trading on Thursday but are just up 0.25%
at the close.
Both the earnings and revenue beat puts some ETFs having higher
allocation to this Internet giant in focus for the coming days.
Investors should closely monitor the movement of these funds and
take opportunity of any surge in AMZN price (see:
all the Technology ETFs here
This is especially true given that AMZN currently has a Zacks Rank
#2 (Buy), which adds to its bullish outlook and suggests good
Market Vectors Retail ETF (
This fund provides exposure to the 26 largest retail firms by
tracking the Market Vectors U.S. Listed Retail 25 Index. Of these,
AMZN takes the second spot at 9.78%. The ETF has a certain tilt
toward growth stocks, accounting for more than half of the
portfolio, while sector wise, specialty retail has nearly one-third
of the share (read:
Is It Finally Time to Buy Retail ETFs?
The product has amassed $24.7 million in its asset base and charges
35 bps in annual fees. Volume is moderate as it exchanges nearly
41,000 shares per day. RTH is down over 3% in the year-to-date time
frame and has a Zacks ETF Rank of 3 or 'Hold' rating with a
'Medium' risk outlook.
PowerShares Nasdaq Internet Portfolio (
This fund follows the Nasdaq Internet Index, giving investors
exposure to the broad Internet industry. The fund holds about 100
stocks in its basket with AUM of $326.3 million while charging 60
bps in fees per year. It trades in moderate volumes of more than
84,000 shares a day.
Amazon occupies the third position with a 8.13% allocation. In
terms of industrial exposure, Internet software and services makes
up for more than two-thirds of the share in the basket, followed by
Internet retail. PNQI lost nearly 4.5% so far this year and
currently has a Zacks Rank of 2 or 'Buy' rating with a 'High' risk
First Trust Dow Jones Internet Index (
This is one of the most popular and liquid ETFs in the broad tech
space with AUM of over $1.9 billion and average daily volume of
more than 486,000 shares. The fund tracks the Dow Jones Internet
Composite Index and charges 57 bps in fees per year (read:
Guide to Internet ETFs
In total, the fund holds 42 stocks in its basket with Amazon taking
the top spot with a 7.16% share. From a sector look, Internet
mobile applications accounts for more than half of the portfolio
while Internet retail make up for 23%. The ETF is down about 3%
year to date and has a Zacks Rank of 2 or 'Buy' rating with a
'High' risk outlook.
Want the latest recommendations from Zacks Investment Research?
Today, you can download
7 Best Stocks for the Next 30 Days
Click to get this free report >>
AMAZON.COM INC (AMZN): Free Stock Analysis
FT-DJ INTRNT IX (FDN): ETF Research Reports
PWRSH-ND INTRNT (PNQI): ETF Research Reports
MKT VEC-RETAIL (RTH): ETF Research Reports
To read this article on Zacks.com click here.
Want the latest recommendations from Zacks
Investment Research? Today, you can download 7 Best Stocks for the
Next 30 Days. Click to get this free report