The Earnings Story Changes Amazon.com, Massively (AMZN)
Amazon.com Inc. (NASDAQ: AMZN) has reported earnings as income increased 45% to $207 million in the second quarter to an earnings of $0.45 EPS versus $0.32 a year ago and on revenues up 41% to $6.57 billion versus $4.65 billion a year ago. The problem is that Thomson Reuters had estimates of $0.54 EPS and $6.54 billion in revenue. Shares are reacting very unfavorably to the initial report.
As far as guidance, net sales are expected to be $6.90 to $7.625 billion, reflective of 27% to 40% growth. That is a rather wide range. Next quarter estimates from Thomson Reuters are $0.61 EPS and $7.15 billion in revenues.
Guidance for operating income is between $210 and $310 million, which is being represented as a 16% decline and 24% growth versus Q3-2009. This guidance includes approximately $130 million for stock-based compensation and amortization of intangible assets.
Guidance for operating income is between $210 and $310 million, which is being represented as a 16% decline and 24% growth versus Q3-2009. This guidance includes approximately $130 million for stock-based compensation and amortization of intangible assets.
The company noted that it is now selling more Kindle books than hardcover books, at a rate of 143 Kindle books per 100 hardcover books. This was listed as 180 Kindle books to 100 hardcover books if just measured over the last month.
International segment sales (U.K., German, Japanese, French and Chinese sites) were $2.98 billion, up 35% from second quarter 2009. That figure would have been 38% excluding the unfavorable impact from currency changes.
Shares closed up unofficially by 2.25% at $120.07 and the 52-week range is $77.51 to $151.09. Its chart will be very important head as its 50-day moving average was $121.51 and the 200-day moving average was $125.61.
The after-hours reaction is an absolute crusher against Amazon.com. The revenues being there is one thing, but the sharp fall is based solely around that EPS number being so short. Amzon said that its operating margin as a percentage of worldwide sales went from 5.5% in Q1-2010 down to 4.1% in Q2-2010. That number is just one of the numbers though and it is before the segment break-outs.
Shares were down as much as 14%, but the stock is now down 13% at $104.40 in active after-hours trading.
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