Seeking Alpha, Inc. (AMZN)

  • Oct. 24, 2014, 5:52 PM
    • "Investor pessimism doesn’t seem to dampen [Jeff] Bezos’s appetite for risk. Employees unsettled by Amazon’s (AMZN -8.2%) steadily depreciating stock price are probably the only thing that can force Bezos to slow down," writes BloombergBusinessweek's Brad Stone in the wake of Amazon's Q3 miss and soft guidance.
    • Stone, who wrote a popular book on Bezos and Amazon, notes declining employee stock grant values caused by investor angst over Amazon's losses could increase employee turnover, something management is unlikely to ignore. Thus, curbing spending (with the goal of boosting Amazon's shares) could go hand-in-hand with keeping needed employees happy.
    • How much could lower spending boost profits? In a much-discussed September post, Benedict Evans estimated Amazon's trailing free cash flow would be around $4B (rather than a current $1.08B) if its capex/sales ratio remained at 2009 levels.
    • Nonetheless, Evans defended Bezos' strategy: "Amazon has perhaps 1% of the US retail market by value ... Jeff Bezos’s view is pretty clear: keep investing, because to take profit out of the business would be to waste the opportunity ... The question to ask isn’t whether Amazon is some profitless ponzi scheme, but whether you believe Bezos can capture the future."
    • The sell-side was in a less forgiving mood today: Two downgrades arrived (from Cowen and Janney), as did a slew of target cuts. Notably, analysts often expressed more concerns about Amazon's top-line growth slowdown (particularly for media and international sales) than its bottom-line pressures.
    • Prior Amazon earnings coverage
    | Oct. 24, 2014, 5:52 PM | 9 Comments
  • Oct. 24, 2014, 12:56 AM
    • "Can you tell us or remind us what financial measures are important to you guys ... it's a little hard to see any of them making positive progress," asked Wolfe Research's Aram Rubinson during Amazon's (NASDAQ:AMZN) Q3 CC (transcript), just one of several pointed questions offered.
    • Bernstein's Carlos Kirjner asked about weak international margins - international op. loss rose to $224M from $28M a year ago - and why international's growth (14%) has fallen far behind North America's (25%). CFO Tom Szkutak (again) chalked up Amazon's losses to growth investments, and gave little detail about growth other than to state it "has been softer across a number of geographies."
    • BGC's Colin Gillis asked why North American media growth (+5%) was the lowest in years. Szkutak mentioned Amazon is seeing a demand shift from textbook purchases to rentals (could be a positive for CHGG), and that heavy discounting last year made for tough comps.
    • Total media revenue rose 4% to $5.2B vs. 10% in Q2, and total electronics/general merchandise revenue 26% to $14B vs. 27% in Q2. North American "Other" revenue (mostly AWS) rose 40% to $1.34B, and returned to positive Q/Q growth (15%) following huge price cuts earlier in 2014.
    • Other details: 1) $170M in charges were taken, largely related to the slumping Fire Phone. 2) Paid unit growth was 21% vs. 23% in Q2, and 3rd-party sellers made up 42% of units vs. 41%. 3) Gross margin rose 120 bps Y/Y to 28.9%. 4) Fulfillment, tech/content and marketing spend respectively rose to 12.4%, 10.8%, and 4.7% of revenue from 11.5%, 9.2%, and 3.9% a year ago.
    • Shares finished AH trading down 10.7%, making new 52-week lows along the way. Not factoring post-earnings estimate revisions, they now trade for 1.2x 2015E sales.
    • Q3 results, guidance/details, PR
    | Oct. 24, 2014, 12:56 AM | 14 Comments
  • Oct. 23, 2014, 4:17 PM
    • Amazon (NASDAQ:AMZN) reports another unprofitable quarter amid strong growth and a flurry of new device releases.
    • North American revenue +24.9% Y/Y to $10.301B
    • International revenue +13.6% to $7.712B.
    • Media revenue +4.2% to $5.244B
    • Other revenue +36.7% to $1.382B.
    • Fulfillment spend +29.9% to $2.643B.
    • Operating cash flow +15% to $5.71B.
    • Guidance: The company sees revenue of $27.3B-$30.3B in Q4 vs. $30.9B consensus. A Q4 operating loss of between -$570M and -$430M is expected.
    • AMZN -8.5% AH.
    | Oct. 23, 2014, 4:17 PM | 49 Comments
  • Oct. 23, 2014, 4:03 PM
    • (NASDAQ:AMZN): Q3 EPS of -$0.95 misses by $0.21.
    • Revenue of $20.58B (+20.4% Y/Y) misses by $260M.
    • Shares -5.2%.
    • Press Release
    | Oct. 23, 2014, 4:03 PM | 60 Comments
  • Oct. 22, 2014, 5:35 PM
  • Jul. 24, 2014, 7:35 PM
    • "We have a long-term view ... We’re not trying to optimize for short term profits," states Amazon (NASDAQ:AMZN) CFO Tom Szkutak on the Q2 CC, repeating a mantra his company has uttered in some form for years. Judging by the reaction to the company's EPS miss and guidance for a sizable Q3 op. loss, investor patience seems to be wearing thin.
    • Szkutak admitted Amazon Web Services' near-term growth has been hurt by an ongoing cloud infrastructure price war with Microsoft and Google - while North American "Other" revenue was up 38% Y/Y, it fell 3% Q/Q, and Y/Y growth decelerated from Q1's 60%.
    • He also suggests Amazon's Q3 bottom line will be pressured by a "significant" increase in video content spend. The company plans to spend $100M on original programming alone, as it tries to counter Netflix's big content investments and keep Prime renewal rates high.
    • On the bright side, Szkutak says Prime subscriptions are still growing well following this year's $20 price hike, and that Q2 subscriber adds topped year-ago levels (no specific numbers, as usual). CIRP survey data appears to back him up.
    • Regarding China, he states Amazon has "a lot of interesting things" planned, and will continue investing in the Middle Kingdom. Alibaba remains the Chinese e-commerce market's 800-lb. gorilla.
    • Q2 results, guidance/details.
    | Jul. 24, 2014, 7:35 PM | 29 Comments
  • Jul. 24, 2014, 4:38 PM
    • 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.
    | Jul. 24, 2014, 4:38 PM | 64 Comments
  • Jul. 24, 2014, 4:20 PM
    • (NASDAQ:AMZN): Q2 EPS of -$0.27 misses by $0.12.
    • Revenue of $19.34B (+23.2% Y/Y) beats by $20M.
    • Shares -3.8%.
    • Press Release
    | Jul. 24, 2014, 4:20 PM | 31 Comments
  • Jul. 23, 2014, 5:35 PM
  • Apr. 24, 2014, 10:40 PM
    • After initially trading higher following its Q1 revenue beat, Amazon (AMZN) finished AH trading up just 0.3%. A possible factor: CFO Tom Szuktak shared on the CC Amazon's Y/Y paid unit growth fell to 23% in Q1 from 25% in Q4 and 29% in Q3. Slowing unit growth "remains a yellow flag since [the metric] is a better proxy than revenues for the overall velocity of the business," says Baird's Colin Sebastian.
    • While paid unit growth slowed, "Other" North American revenue, a segment dominated by Amazon Web Services, saw revenue growth accelerate to 60% from 52% in Q4. For now, the segment only accounts for 6% of revenue.
    • Thanks to AWS and 28% EGM growth, North American sales growth (+26%) was roughly even with Q4. International sales growth picked up to 18% from 13%, with 27% EGM growth offsetting 4% media growth.
    • AWS and 3rd-party fulfillment growth helped gross margin rise 230 bps Y/Y to 28.8%. But fulfillment spend rose to 11.7% of revenue from 11.1% a year ago, tech/content spend (boosted by video licensing and AWS capex) to 10% from 8.6%, and marketing to 4.4% from 3.9%.
    • Meanwhile, the WSJ reports Amazon is quietly testing its own delivery network (trucks and all) in San Francisco, L.A., and NYC. It's probably not a coincidence all three markets are ones in which the AmazonFresh same-delivery has launched, or is expected to.
    • Q1 results, guidance/details, PR
    | Apr. 24, 2014, 10:40 PM | 7 Comments
  • Apr. 24, 2014, 4:08 PM
    •, Inc. (AMZN): Q1 EPS of $0.23 misses by $0.01.
    • Revenue of $19.74B (+22.8% Y/Y) beats by $320M.
    • Press Release
    | Apr. 24, 2014, 4:08 PM | 15 Comments
  • Apr. 24, 2014, 12:10 AM
  • Apr. 23, 2014, 5:35 PM
  • Jan. 31, 2014, 2:38 PM
    • Though its shares have tumbled, Amazon (AMZN -9.9%) has received an equal number of PT hikes and cuts (7 apiece) after missing Q4 estimates, offering soft Q1 guidance, and stating it's weighing a Prime price hike as it contends with heavy usage and still-surging fulfillment spend. S&P is the only firm to change its rating, cutting shares to Sell.
    • Benchmark remains optimistic about long-term margin expansion, and believes Amazon will still deliver 32% OIBDA growth in Q1. The firm chalks up Q4's major slowdown in EGM revenue growth (23% vs. 29% in Q3) to aggressive holiday season electronics discounting.
    • Cowen estimates a Prime price hike would produce $380M-$760M/year in gross profit at current subscriber levels. Morgan Stanley believes the churn impact of a hike would be limited, given its belief "Prime remains one of the best values around."
    • Susquehanna likes the fact gross margin rose again. Evercore thinks Amazon's paid unit growth slowdown (25% vs. 29% in Q3) is "largely temporary," and have much to do with Amazon's international media sales being behind its U.S. ops in transitioning to digital.
    • Amazon mentioned on its CC (transcript) active accounts rose by 13M Q/Q to 237M. 3rd-party sellers accounted for 39% of paid units vs. 40% in Q3.
    | Jan. 31, 2014, 2:38 PM | 42 Comments
  • Jan. 30, 2014, 6:21 PM
    • Amazon (AMZN) states on its Q4 CC it's thinking of raising Amazon Prime's price for U.S. subs (currently $79/year) by $20-$40/year.
    • The remark follows a 2013 in which Prime, from all indications, saw tremendous growth; Macquarie recently confirmed Amazon now has 20M+ Prime subs. Amazon's October decision to hike its free shipping minimum by $10 to $35 may have led to a late-year pickup in Prime sign-ups.
    • Though off their AH lows, shares continue trading lower in response to Amazon's Q4 miss and largely below-consensus revenue guidance. North American and international revenue growth rates of 26% and 13% Y/Y represent slowdowns from Q3 levels of 31% and 15%.
    • Price hikes or not, Amazon continues to spend aggressively: Fulfillment spend rose to 11.4% of revenue from 10.6% a year ago. Marketing spend rose to 4.4% from 4%, and tech/content spend rose to 7.2%  from 6.3%. On the other hand, gross margin rose to 26.5% from 24.1%.
    • Amazon Web Services remains a bright spot: Amazon's North American "Other" revenue (dominated by AWS) rose 16% Q/Q and 52% Y/Y to $1.17B.
    | Jan. 30, 2014, 6:21 PM | 21 Comments
  • Jan. 30, 2014, 4:26 PM
    • Amazon (AMZN) saw revenue growth decelerate in Q4 from the previous two quarters (Q3 24%, Q2 22%).
    • North America sales rose 25.9% Y/Y to $15.33B, while International sales were up 12.8% to $10.26B.
    • The company saw a nearly even growth rate between media and electronics in North America.
    • Q1 guidance is below expectations. Sales are projected at $18.2B-$19.9B and the company sees an operating gain/loss of -$200M to $200M.
    • AMZN -9.9% AH
    | Jan. 30, 2014, 4:26 PM | 17 Comments
Company Description 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.
Sector: Technology
Country: United States