Earnings Preview: Amazon.com

Jul.25.12 | About: Amazon.com, Inc. (AMZN)

Amazon.com (NASDAQ:AMZN) is expected to report Q2 earnings after the market close on Thursday, July 26 with a conference call scheduled for 5:00 pm ET.


Analysts are looking for EPS of 2c on revenue of $12.89B. The consensus range is (23c)-37c for EPS, and $12.51B-$13.21B for revenue, according to First Call. After reporting better-than-expected EPS and revenue in Q1, the company expected Q2 revenue to be in the range of $11.9B-$13.3B. The company also announced Q1 active customer accounts exceeded 173M and its Q1 inventory increased 47%. Investors will be looking for updates on the new Kindle Fire and other tablets or smartphones it has reportedly been working on. Amazon should also provide details on its distribution, since Target (NYSE:TGT) stopped carrying Kindles over the summer, and since Amazon agreed to a new deal with U.K. bookseller Waterstones. The company will also most likely address the effect of the European economy and sales tax requirements on their profit margin and bottom line. In the previous quarter, Amazon announced several agreements to enhance their Prime Instant Video product, including deals with Paramount, NBCUniversal, Warner Bros. and MGM.

Analyst Views

Amazon was upgraded to Buy at Nomura, BofA/Merrill, SunTrust and Goldman, with analysts citing expansion opportunities, increasing revenue, and strong outlook.