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E-commerce Q2 Earnings to Watch on Jul 28: AMZN, EXPE, STMP

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The Q2 earnings season is in full swing, with as many as 1000 companies, including 189 S&P 500 members, scheduled to post their financial numbers this week.

Results till now have shown a modest improvement from the extremely weak levels over the last couple of quarters. However, growth is still non-existent. Coming to the technology sector, it is likely to fall prey to earnings decline from the year-earlier level. Total earnings in the tech sector are expected to be down 3.0% despite2.7% higher revenues compared with last quarter’s 4.5% earnings decline in spite of0.4% higher revenues. Excluding Apple, the tech sector’s earnings are anticipated to be up 3.5%. (Read more: Decisive Week for the Q2 Earnings Season)

E-commerce is one of the most important components of the technology sector. The online trend continues to gather steam as the younger generation is rapidly adapting to fast-advancing technology. Also, improvements in the mobile device segment have led the online companies to deliver strong numbers.

Here, we take a sneak peek into three major e-commerce providers like Amazon (AMZN - Free Report) , Expedia (EXPE - Free Report) and Stamps.com Inc. that are lined up to report second-quarter earnings results on Jul 28:

Amazon, the world's largest Internet retailer, recorded a positive earnings surprise of 75.4% last quarter. In fact, Amazon outperformed the Zacks Consensus Estimate thrice in the last four quarters, with an average positive surprise of 133.6%.

Notably, our proven model shows that Amazon is likely to beat the Zacks Consensus Estimate as it has the right combination of a positive Earnings ESP and a favorable Zacks Rank (Zacks Rank #3 (Hold) or better).

The Earnings ESP for Amazon is +37.72%. This is because the Most Accurate estimate stands at $1.57 while the Zacks Consensus Estimate is pegged at $1.14. Meanwhile, the company has a Zacks Rank #3, which increases the predictive power of ESP. Therefore, we are reasonably confident in looking for an earnings beat. (Read more: Amazon Stock 2Q Earnings Preview: Looking for a Beat)

AMAZON.COM INC Price and EPS Surprise

AMAZON.COM INC Price and EPS Surprise | AMAZON.COM INC Quote

Expedia is a leading online travel companies in the world. The company delivered a positive earnings surprise of 46.87% last quarter. Notably, the company missed the consensus mark in the preceding three quarters out of four, resulting in a negative average surprise of 6.32%.

However, for the upcoming results, Expedia has an Earnings ESP of +6.82% as the Most Accurate estimate stands at 47 cents while the Zacks Consensus Estimate is pegged at 44 cents. Also, the company has a Zacks Rank #2 (Buy), which increases the predictive power of ESP. So going by our proven model, Expedia is also likely to beat on earnings this time.

EXPEDIA INC Price and EPS Surprise

EXPEDIA INC Price and EPS Surprise | EXPEDIA INC Quote

Stamps.com Inc. provides Internet-based services for mailing or shipping letters, packages or parcels anywhere in the U.S. The company delivered a positive earnings surprise of 111.59% last quarter. Notably, Stamps.com outperformed the Zacks Consensus Estimate in each of the trailing four quarters, with an average positive surprise of 56.61%.

For the second quarter, Stamps.com has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 91 cents. The company has a Zacks Rank #1 (Strong Buy), which increases the predictive power of ESP. However, a 0.00% ESP makes surprise prediction difficult.

STAMPS.COM INC Price and EPS Surprise

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