For the second time this week, one of the world's biggest and
most well known companies blew past quarterly expectations at a
time when many were doubtful. On Tuesday it was
), and today it was
), the world's largest online retailer.
AMZN announced earnings per share of 28 cents for the first
quarter, compared to the Zacks Consensus Estimate at 7 cents. That
accounts for a surprise of 300%!. Some analysts were expecting a
loss in the quarter.
As anticipated, the result was far below the year-ago result of
44 cents. AMZN has proved that it isn't afraid to take short-term
hits in order for long-term gains. The company's operating expenses
have been moving higher as it expands into new markets.
Specifically, the company has been increasing its fulfillment
centers in Europe, China and the U.S. Such things have taken a toll
on year-over-year earnings.
However, most of the market was more concerned with sales
anyway, and AMZN didn't disappoint. Net sales jumped 34% to $13.18
billion, compared to $9.86 billion last year. Again, this was well
above the Zacks Consensus Estimate, which was expecting about
$12.88 billion. According to the company, the Kindle Fire remained
"the #1 bestselling, most gifted, and most wished for product
across the millions of items available on Amazon.com since
Now we'll have to see if this report is enough to enhance the
company Zacks Rank, which is currently a Zacks #3 Rank (Hold). The
only way to do that is through upward earnings estimate revisions.
There hasn't been much movement in that regard of late. Out of 29
total estimates for 2012, there have been three downward revisions
in the past 30 days and none to the upside.
As a result, the Zacks Consensus Estimate for this year has
moved down by a fractional 2 cents in the past month to $1.36 per
share. The outlook for 2013 is down 9 cents in that time to $2.66
per share, which also suggests year-over-year improvement of more
For the second quarter, AMZN forecasts net sales between $11.9
billion and $13.3 billion, or growth between 20% and 34%. It also
expects another stiff year over year loss for profit.
In addition to concerns about its year-over-year profit, there's
also some anxiety over the competition that AMZN faces. The iPad
has already become a competitor to the Kindle, and there are other,
smaller players. And don't forget the competition within online
For now though, the market can take some solace in the fact that
the consumer came out to support Amazon in the first quarter, which
is good news for the company and the economy.
AMZN shares are up more than 13% after hours. We'll have a lot
more info on this quarter coming up…
AMAZON.COM INC (
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