Scalper1 News
Mighty e-commerce giant Amazon.com ( AMZN ) will fall well short of Wall Street’s Q1 earnings estimates, at least one analyst predicts. Wedbush analyst Michael Pachter, however, expects sales to beat view, he said in a research note Wednesday. The company is slated to report Q1 earnings after the close Thursday. Pachter forecasts earnings per share minus items of 45 cents. That would swing from a 12-cent loss in the year-earlier quarter, but analysts polled by Thomson Reuters have modeled EPS ex items of 58 cents. IBD Take: Amazon is a Leaderboard stock. Find out why at IBD Stock Checkup. Amazon is known for de-emphasizing profit as it strives for growth. Capital expenditures on items such as new fulfillment centers , more digital content, expansion of several of its e-tail lines and expanding delivery offerings will contribute to lower-than-expected earnings, Patcher wrote. Analysts have modeled a 21% increase in revenue vs. Q1 2015, to $28 billion. That would be down a tad from 22% and 23% year-over-year growth in the two preceding quarters. The Amazon Prime loyalty program also is going to eat into profits, Pachter says, because of the company’s aggressive efforts to sign up more members. Pachter also expects Prime’s new monthly $10.99 payment option — previously it was only available for $99 for 12 months — will further boost membership, especially around the holiday shopping season . Amazon’s cloud services division, Amazon Web Services, is likely to continue to see growing gross and operating margins, Patcher says. But he expects growth to be “measured” due to the company’s investments in international data centers. Patcher says a recent letter Amazon CEO Jeff Bezos sent to shareholders suggests that the company is going to continue to “invest in growth” beyond what Wall Street is expecting. Amazon’s Q4 2015 financials fell shy of Wall Street’s outsized expectations. Image provided by Shutterstock . Scalper1 News
Scalper1 News