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More on Amazon's Q1: Operating income of $192M well above guidance, but down 40% Y/Y. Company...

More on Amazon's Q1: Operating income of $192M well above guidance, but down 40% Y/Y. Company expects Q2 operating income of -$260M to $40M. North American sales +36% Y/Y (+37% in Q4), international +31% (even with Q4). Merchandise sales +43%, media +19%. Cost of sales growth (+32%) slightly below revenue growth, but fulfillment expense growth (+51%) well above. $960M in shares repurchased. No specifics on Kindle sales. AMZN +10.2% AH. (PR)
Comments (15)
  • I don't understand what is so special about these numbers. Great topline growth with negative bottomline growth is what I see and the market cheers it with a 12% boost.
    26 Apr 2012, 04:53 PM Reply Like
  • ...with an already extremely high valuation; 77.1 FPE.
    26 Apr 2012, 05:10 PM Reply Like
  • What, are we playing hide the margin? Where's the margin??
    26 Apr 2012, 05:13 PM Reply Like
  • Amazing. EPS Q1 '11 of 0.44 declined to 0.28. Although GM edged up slightly due to increased service revenue (24% vs 23% in Q1 '11), fulfillment and technology and content costs continue to increase significantly. OM were barely 1.5%! Will be interesting to see how much net shipping costs are as they were 5% of revenue as of 12/31/11, a virtually non-existent cost for bricks and mortar retailers! And if the firm cannot gain control over fulfillment and tech costs, it is only a matter of time before the stock comes crashing down. Although it appears the c*kehead traders love pushing this stock up for no apparent reason. Their education level is no different than those on the show "Jersey Shore."

     

    Since Bezos is in this for the long-term (a century plus) operating margins do not matter! LOL.
    26 Apr 2012, 05:20 PM Reply Like
  • What is the P/E now with the stock at $224? 160? I simply do not understand what they have to make in next 5 to 10 years to justify this price. I am not saying I want to short the stock. I am just completely befuddled by the market reaction. Can someone enlighten me? What are people looking for in this stock?
    26 Apr 2012, 05:25 PM Reply Like
  • I agree with you 100%. It amazes me how this stock performs. It's up 15% in the after hours on these numbers, yet Apple which knocked the ball completely out of the ball park with revenue up 35% (compared to 34% for Amazon), profits up 94% year over year (instead of down 35% for Amazon), and margins of 47% (instead of 1.5% for Amazon) only went up 9%. And Apple sells at a P/E of 17 compared to the Amazon's 160. Go figure.
    26 Apr 2012, 05:56 PM Reply Like
  • With the margin 0-2% its price never justified. Never.
    26 Apr 2012, 06:06 PM Reply Like
  • Sooner or later it will end in tears.
    26 Apr 2012, 05:26 PM Reply Like
  • This group of commenters all seem to be on the same page but there are obviously plenty of buyers who see it differently. The more amazing thing is the range of operating profit given for Q2 (-$260MM to +$40MM) which would indicate a likely loss for the quarter. If they have $0 earnings in Q2, their trailing EPS will be $0.80. The stock is trading over $220 after hours so they will be trading at 275x projected June 2012 TTM earnings.

     

    I'm still waiting for a bull on the stock to explain to me how they will get to $10/share in earnings which would still put them at the highest multiple of any retailer out there (or at least in line with the best retailer in my view, Costco). This is insanity.
    26 Apr 2012, 05:49 PM Reply Like
  • That is my point. The fundamental NOW cannot justify the stock price. So other than momentum, is there any other justification for this nose bleeding P/E? I read some SA authors saying about Amazon's very strong cloud service. Would that be enough to bring in billions of earnings down the road?

     

    AAPL is making $11.6 billions last quarter and I have RIMM troll flaming me and saying the stock will go back down $400's in a few months. That will be single digit P/E by then. But now I am seeing people paying 200+ forward P/E to buy Amazon. I am completely at a loss how to justify this discrepancies.
    26 Apr 2012, 06:57 PM Reply Like
  • Check this out- when margins and profit are so thin and nebulous- a simple equity investment line of $89MM accounts for over 2/3rds of the $130MM Net Income - or in other words, they would have reported $0.09c in EPS. An $89MM accounting trick saves the day for $13.2BB in revenue - what a joke

     

    http://bit.ly/KeQeyN
    26 Apr 2012, 05:52 PM Reply Like
  • I note that they had an accounting trick which last year was negative 17 million is now a positive 89 million. Without that the earnings are horrible. Still no Kindle data so it is unclear to me when this stock gets whacked. Cannot short it tonight on TD Ameritrade since I got no stock available.
    26 Apr 2012, 06:30 PM Reply Like
  • One of life's great mysteries is the attraction of this stock. I guess if investors are willing to buy the stock it isn't overpriced, but c'mon. The company's been around for quite a while now and investors seem to be waiting to happen. AMZN has fewer than half the shares outstanding as AAPL and posted earnings of 28 cents a share. Apple posted earnings of $12.30. Maybe I'll just start buying AMZN shares because obviously I'm missing something.
    27 Apr 2012, 12:18 AM Reply Like
  • Both AMZN's high price and AAPL's low price have been irrational for a long time now. I wonder whether rational valuations will ever be achieved. How the hell are you supposed to trade without suspending your own intelligence?
    27 Apr 2012, 02:09 AM Reply Like
  • How is Amazon worth 100 billion dollars? Worth more than Boeing and Lockheed Martin combined. Give me a break.
    28 Apr 2012, 12:18 AM Reply Like
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