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Jul. 24, 2015, 9:17 AM
Jul. 23, 2015, 5:43 PM
Jul. 23, 2015, 4:46 PM
- Amazon Web Services (NASDAQ:AMZN) had Q2 revenue of $1.82B, +16% Q/Q and +81% Y/Y. Annual growth accelerated sharply from Q1's 49%. AWS segment op. profit rose over 5x Y/Y to $391M.
- Regional/segment performance: North American revenue (excludes AWS) +26% Y/Y to $13.8B; op. profit +114% to $703M. International revenue +3% to $7.6B (+22% exc. forex); op. loss of $19 vs. $2M a year ago. North American Electronics and General Merchandise (EGM) revenue +31% to $10.99B; Media +6% to $2.62B. International EGM revenue +10% to $5.43B; Media -12% to $2.09B.
- Financials: Gross margin (boosted by AWS and 3rd-party seller growth) rose to 34.6% from 32.2% in Q1 and 30.7% a year ago, giving a lift to EPS. Fulfillment spend +21% Y/Y to $2.88B; marketing +22% to $1.15B; tech/content +36% to $3.02B; G&A +24% to $467M. Trailing 12 months (TTM) op. cash flow +69% to $8.98B. Amazon ended Q2 with $14B in cash/investments, and $8.3B in long-term debt.
- Shares have surged to $570.59 AH, easily taking out their old highs and leading Amazon's market cap to surpass Wal-Mart's. The firms that upgraded ahead of earnings are looking smart.
- Q2 results, PR
Jul. 23, 2015, 4:13 PM
- Amazon (NASDAQ:AMZN): Q2 EPS of $0.19 beats by $0.33.
- Revenue of $23.18B (+19.9% Y/Y) beats by $790M.
- Expects Q3 revenue of $23.3B-$25.5B (+13%-24% Y/Y) vs. a $23.89B consensus.
- Expects Q3 op. income of -$480M to $70M. Guidance assumes $580M in stock compensation and amortization expenses.
- Shares +16.1% AH
Jul. 22, 2015, 5:35 PM
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Jul. 20, 2015, 11:23 AM
- Believing Amazon (AMZN +1.4%) will surpass Macy's as the top U.S. apparel retailer by 2017, Cowen's John Blackledge has upgraded to Outperform, and hiked his target by $130 to $565. Wedbush's Michael Pachter has also upgraded to Outperform, while hiking his target by $140 to $575.
- Blackledge: "We estimate the US Apparel business will grow from $16BN Gross Merchandise Value (GMV) in 2015 to $52B GMV in 2020. This implies a gain in U.S. Apparel & Accessories market share from 5% to 14%" He believes Amazon's apparel purchaser growth has been accelerating, thanks to growing selection, tech/imaging investments, and deals with major brands.
- Pachter cites Netflix's Q2 numbers, AWS' performance, Amazon's Prime Day figures, and "the increased likelihood that Amazon can add at least $2 billion to revenue from capturing PayPal payments." He expects Q2 sales to be slightly above consensus.
- Amazon has made new highs ahead of Thursday's Q2 report. Shares +58% YTD.
- Six days ago: UBS upgrades Amazon, cites Prime and fulfillment growth
- Update: Bernstein and BofA/Merrill are also out with bullish notes today. Bernstein's Carlos Kirjner declares his Q2, 2015, and 2016 estimates to be "way above" Street estimate. BofA/Merrill's Justin Post states Amazon remains a "top idea," while citing Prime and AWS growth.
Jul. 17, 2015, 8:27 PM
- Miramax, the studio home for prestige films founded by Harvey and Bob Weinstein, is looking for a buyer in a sale it hopes will draw $1B, Bloomberg reports.
- Investment is coming back to the film sector in a rebound year for movies, and studio owners Colony Capital and Qatar Holding are betting that content-hungry distributors will take an interest in an award-heavy film library, including Oscar winners like Shakespeare in Love, Pulp Fiction and Good Will Hunting.
- Colony Capital and the Qatar sovereign wealth fund were among the group that bought Miramax from Disney for $660M five years ago.
- Potential buyers? That could include content-acquisitive streaming services like Hulu (CMCSA, DIS, FOXA), Netflix (NASDAQ:NFLX) or Amazon.com's Instant Video (NASDAQ:AMZN), or studios like MGM or oft-rumored buyer Lions Gate (NYSE:LGF), says Variety's James Rainey. A price of $1B is too steep for some of them, but with low information, it's tough to put a solid value on Miramax.
Jul. 16, 2015, 1:36 PM
- Amazon (NASDAQ:AMZN) states it saw 18% more orders during yesterday's Prime Day promo than it did during last year's Black Friday, and 266% more than on the same day a year ago. Sales from 3rd-party sellers using Amazon's fulfillment services rose nearly 300% Y/Y.
- 34.4M items were sold in Prime-eligible locales, including "hundreds of thousands" of Fire TV HDMI sticks (among the items on sale). "After yesterdays results, we'll definitely be doing this again," says an Amazon VP.
- The figures come in spite of a social media backlash among Prime subs disappointed with Amazon's Prime Day discounts. "Now printing: t-shirts that read 'I stayed up late for @Amazon #PrimeDay and all I got was Tupperware,'" quips one Twitter user.
- Amazon has rallied to new highs amid a 1% Nasdaq gain. A bullish Oppenheimer note regarding AWS growth could be helping: The firm states checks point to accelerating AWS volumes (+100% Y/Y) in spite of limited price cuts over the last 9 months. "We believe Street models do not fully reflect accelerating growth from stronger volumes and easier comps. In addition, we attended the AWS Summit in NY last week and were encouraged by several product announcements, customer stats and high attendance."
- Meanwhile, rival eBay reported a 3% Y/Y Q2 drop in Marketplaces revenue this morning - forex pressures contributed, as did share loss to Amazon and others. Amazon's Q2 report arrives on July 23.
Jul. 15, 2015, 8:56 AM
- Today's promotional battle between Wal-Mart (NYSE:WMT) and Amazon (NASDAQ:AMZN) could have two winners (besides consumers) and many losers, according to retail analysts.
- The retail machines could pull forward some back-to-school sales away from rivals and smaller chains without the online reach.
- Shopatron's John Pincott notes it's nearly impossible for consumers to miss the Amazon and Wal-Mart deals due to the broad marketing efforts and allure of a Black Friday-type event.
- Amazon initiated the promotional battle with a one-day sale celebrating the company's 20th anniversary, while Wal-Mart continues to counterpunch against the moves coming out of Seattle.
- Margin worries will continue to be in the background while the heavyweights slug it out for top-line growth.
- What to watch: Companies in the line of fire of the promotional salvos include Staples (NASDAQ:SPLS), Best Buy (NYSE:BBY), Target (NYSE:TGT), Costco (NASDAQ:COST), and Office Depot (NASDAQ:ODP). There's also an alarming trend in play for department stores (JCP, DDS, KSS, M, TJX) with more BTS family shopping for clothing turning online.
Jul. 14, 2015, 1:13 PM
- A day after Rackspace (NYSE:RAX) announced a services partnership with Microsoft related to Azure, shares are rallying in response to a CRN report stating a similar deal with Amazon Web Services (NASDAQ:AMZN) is close.
- CRN states a channel partner for both Rackspace and Amazon "approached his company with an offer to participate in a beta program in which Rackspace would manage and provide support for his customers hosting workloads in Amazon's cloud." The source: "They are going to wrap their managed 'Fanatical Support' around AWS and essentially become an Amazon reseller."
- AWS had revenue of $5.16B over the 12 months ending March 31, and (per Synergy Research) still controls nearly 30% of the global cloud IaaS/PaaS market.
- Rackspace is now up 8.5% over the last two days. Shares are still down 17% YTD.
Jul. 14, 2015, 9:40 AM
- UBS' Eric Sheridan, upgrading Amazon (AMZN +1.5%) to Buy and hiking his target by $100 to $550: "The fast growing and higher spending Prime subscriber base has increased the importance of selling Prime eligible items, leading to greater penetration of the [Fulfilled By Amazon] offering within Amazon's base of [3rd-party] sellers ... the resultant increase in Prime eligible product selection will lead to greater site conversion, increased annual spend per customer, and ultimately, higher levels of gross merchandise value for Amazon."
- He's also upbeat about: 1) Potential fulfillment spending leverage as investments slow. Sheridan estimates Kiva's robots could save over $900M/year in personnel costs. 2) AWS' continued growth. 3) Optionality around China. Sheridan speculates Amazon could take a stake in #2 Chinese e-commerce firm JD.com to help stem local losses.
- Ahead of Amazon's July 23 Q2 report, Sheridan has respectively hiked his 2015 and 2016 revenue estimates by $2.5B and $5B to $105.2B and $126B, and his CSOI estimates by $700M and $1.5B to $3.3B and $5.6B.
- Three weeks ago: Evercore downgrades Amazon, cites valuation and growing capex
Jul. 13, 2015, 8:00 AM
- Wal-Mart (NYSE:WMT) plans to launch an aggressive online sale on Wednesday in a countermeasure to Amazon's (NASDAQ:AMZN) Prime Day savings promotion on July 15 for Prime members.
- Sales on over 2K items will be rolled back at Wal-Mart for at least 90 days.
- The company has also lowered the minimum order amount to qualify for free shipping to $35 from $50 for at least a month.
- Best Buy (NYSE:BBY) and Target (NYSE:TGT) are also looking for a July sales boost with Black Friday sales planned around the timing of the Amazon event.
Jun. 30, 2015, 2:31 PM
- Amazon (AMZN +1.1%) has begun selling physical goods on its Mexican site (Amazon.com.mx), and has also set up a local marketplace and fulfillment services for 3rd-party sellers. Until now, the company only sold e-books through its Mexican ops.
- Mexico has 120M people, and had a GDP of $1.3T. Unreliable shipping and a lack of credit have slowed e-commerce adoption in the country. Amazon is looking to address those issues by enabling order pickups at hundreds of locations, and by providing a slew of different payment options (including, shortly, monthly payments). It's also providing free shipping on orders above 599 pesos ($38) that are fulfilled by the company.
- Separately, Amazon says AWS will launch an Indian data center infrastructure in 2016 to better service local clients, which already number in the thousands, and address data sovereignty concerns. AWS currently offers services via data centers in the U.S., Europe, China, Japan, and Brazil, among other places.
- Yesterday: Amazon plans to offer business loans in Europe, China, India, Canada
Jun. 29, 2015, 4:12 PM
- Amazon (AMZN -1.8%) loan service for merchants selling on its site, thus far available only in the U.S. and Japan, will be expanded to other countries where it runs seller marketplaces - China, India, Canada, and the 5 biggest EU markets (Germany, France, Italy, Spain, and the U.K.) - later this year.
- The service, founded in 2012 and available on an invite basis, provides 3-to-6 month loans ranging from $1K to $600K to help merchants buy inventory. Amazon mitigates risk by leveraging the volumes of data it has on sellers, as well as by taking product sale proceeds for loan payments. Sellers talking with Reuters reported interest rates ranging from 6%-14%.
- PayPal has offered over $500M worth of small business loans since launching a service in 2013, with eBay sellers accounting for a large chunk of its clients. Alibaba's Ant Financial/Alipay unit is one of a slew of firms offering loans to Chinese online merchants.
Jun. 25, 2015, 11:03 AM
- Amazon's (AMZN +0.2%) Alexa Fund will invest up to $100M in "developers, manufacturers, and start-ups of all sizes who are passionate about creating new experiences designed around the human voice."
- Investment decisions will be based on "the potential for unique or novel applications of voice technology that leverage the Alexa Skills Kit (ASK) or the Alexa Voice Service (AVS)," both of which were announced today and aim to create an ecosystem around Amazon's Alexa voice assistant. To date, Alexa has been built into Amazon's Echo Web-connected speaker/assistant (just became generally available for $180).
- ASK provides developers APIs to create Alexa-powered apps with custom "skills." One of Amazon's examples: "A fitness service can enable Alexa to access a user’s workout history, so a customer can say 'Alexa, ask My Fitness how many miles I have run this week.'"
- AVS provides hardware makers and their developer partners with tools for creating Alexa-powered devices and related apps. One of Amazon's examples: "A home sound system that lets customers turn on music just by saying 'Play my barbeque playlist on the back deck.'"
- Google (Now), Apple (Siri), Microsoft (Cortana), and Nuance (Dragon PC, mobile, and auto assistants) are among the other firms investing heavily voice assistant platforms, with varying levels of API support. Nuance (NUAN -0.8%) is believed to be powering Amazon's Fire TV and Phone's voice search features; no word yet on its role with Alexa.
- Earlier: Evercore downgrades Amazon, cites valuation and growing capex
Jun. 25, 2015, 8:31 AM
- Evercore's Ken Sena, a long-time bull: "We’re reducing our Amazon (NASDAQ:AMZN) rating to HOLD from BUY as shares now trade within a close range of our $460 target. While retail and Amazon Web Services (AWS) trends appear on track and [near-term] operating margins seemed poised for upside this quarter and next, our reduced rating recognizes the strong run in shares, now up 45% YTD, and the growing capital investment we are seeing through leasing activity, making modeling upside on the basis of [free cash flow] increasingly difficult."
- Sena observes capital leases accounted for over half of Amazon's Q1 capital spending, up from 1/3 in Q1 2013. "While we understand the rationale here, as Amazon takes advantage of a low interest rate environment, it nevertheless masks the true capital intensity of the business when considering standard FCF measures as cash payments are spread out and flow through financing activities..."
- The downgrades comes shortly after Axiom's Victor Anthony (Buy) hiked his target by $40 to $500, citing margin growth potential and AWS' recent numbers. He now values the cloud infrastructure giant at $72B ($150/share), or 7x estimated 2016 sales of $10.4B and 4.7x estimated 2017 sales of $14.8B.
- AMZN -0.6% premarket to $438.30.
Amazon.com Inc is an online retailer. The Company sells its products through the website which provides services, such as advertising services and co-branded credit card agreements. It also offers electronic devices like Kindle e-readers and Fire tablets.
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