Amazon -6% AH; major Q3 op. loss expected

|By:, SA News Editor

Amazon (NASDAQ:AMZN) expects Q3 revenue of $19.7B-$21.5B (+15%-26% Y/Y) vs. a $20.8B consensus. Op. loss is expected to total $410M-$810M, up from just $25M a year earlier.

North America revenue rose 26% Y/Y in Q2 to $12B, and international revenue 18% to $7.3B. The growth rates are even with Q1 levels. North America had a $438M segment op. profit, and international a $34M segment op. loss.

Media revenue +10% Y/Y to $4.8B, a pickup from Q1's 8% growth. EGM revenue +27% to $13.3B, an even growth rate with Q1.

"Other" revenue +37% to $1.22B, with North American "Other" (dominated by AWS) rising 38% to $1.17B. Amazon claims 90% Y/Y AWS usage growth.

Gross margin +210 bps Y/Y to 30.7%. Fulfillment spend +15% to $2.38B, marketing +40% to $943M, tech/content +40% to $2.23B. Free cash flow for the trailing 12 months is $1.04B.

Citi's pre-earnings downgrade was well-timed.

Q2 results, PR

Update: North American "Other" revenue, while up 38% Y/Y, fell 3% Q/Q. Major AWS price cuts (came in the wake of big cuts from Google, and were followed by similar cuts from Microsoft) appear to be the culprit.