Investors have been selling shares of Amazon.com (Nasdaq: AMZN)
over the last four trading sessions, likely positioning themselves
ahead of the online retailer's second-quarter report after the
market close. While the stock has just turned into the red, the
Nasdaq is up 1.3 percent and the DJIA is up 1.6 percent.
Analysts on Wall Street are looking for Amazon.com to report a
quarterly profit of just 2 cents per share. Sales are expected to
be a touch under $12.9 billion. The company posted earnings of 28
cents per share during the first quarter of 2012 and EPS of 42
cents during the second quarter of 2011.
With misses from hot tech names
(Nasdaq: AAPL) and
(Nasdaq: ZNGA) this week, traders will be looking to Amazon for
some more insight into Techland. Even more, with most investors
probably agreeing RIM (Nasdaq: RIMM) should no longer be considered
one of the "Four Horsemen of Tech" (formerly AAPL, GOOG, AMZN,
RIMM), and with Google (Nasdaq: GOOG) recently
topping the Street's Q2 estimates
, Amazon's report could be the largest component left to help
decide the fate of tech for this quarter. The tech sector has been
holding up relatively well (the XLF ETF is down about 4.5 percent
since the beginning of May, compared to 6-plus percent declines in
the XLF and XRT), however, a dismal tone from Amazon could quickly
According to our
page for Amazon.com, 21 sell-side analysts have a Buy rating on the
stock into the quarterly report, 12 have a Neutral, and none have a
Lets take a look at some analyst commentary:
- Goldman Sachs - The firm's report is entitled "moving in the
right direction." Goldman sees inline sales "despite a qoq FX
headwind of $140mn and macro pressures in Europe..."
Goldman is looking for third-quarter sales guidance to be in the
range of $12.94-$14.36 billion, which implies growth of about
19-32 percent. The firm is modeling for Amazon to guide
consolidated segment operating income to the range of $0-$300
million for the third quarter in a row. "Based on manufacturing
delays, we now see 8.3mn Kindle eReaders in 2012 (down 50% yoy).
As a result, we are reducing our forecast for eBook revenue in
2013 by $2.1bn," according to Goldman.
Maintains Buy rating and $280 price target.
- Wedbush - The firm said "Amazon faces its most difficult
comparisons of the year across nearly all of its categories in
addition to ongoing macroeconomic headwinds." Still, Wedbush is
projecting sales to be up 30 percent from last year, "aided by
38% growth in Electronics revenue, reflecting resilient global
ecommerce demand and continued strength in third-party (3P) unit
Wedbush believes "global ecommerce growth remained fairly
resilient through 2Q12." The firm is modeling for moderating
ecommerce growth during the second half of this year, Wedbush
sees the US and EU possibly growing in the low-mid teens range
over 2012. "We suspect the secular shift from offline to online
may be getting more pronounced as the economic slowdown appears
to be having a greater impact on traditional retailers."
Maintains Buy rating and $260 price target.
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