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What to Expect Ahead of Amazon's (AMZN) Q3 Earnings Release?
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Amazon (AMZN - Free Report) is scheduled to report third-quarter 2023 results on Oct 26.
For the third quarter, Amazon expects revenues in the band of $138-$143 billion. Net sales are expected to grow 9-13% from the year-ago quarter’s reported figure.
The Zacks Consensus Estimate for net sales is pegged at $141.61 billion, indicating growth of 11.4% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for third-quarter earnings is pegged at 58 cents per share, significantly up from 20 cents reported in the year-ago quarter.
Earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same once, the average surprise being 40.96%.
Amazon’s solid Prime momentum, along with its strengthening distribution network, are expected to have aided online retail business’ performance in the third quarter.
Prime benefits, including a strong loyalty system, customer-friendly offers, quick grocery delivery services and robust Prime Free One-Day and Prime Free Same-Day Delivery services, are expected to have aided Amazon’s customer momentum in the quarter under review.
AMZN’s strong performance during its mega shopping event Prime Day, conducted at the beginning of the third quarter, is likely to have driven sales in the to-be-reported quarter.
The introduction of the Buy with Prime app for Shopify, which enables Prime members to avail of various Prime benefits like quick and free delivery and easy returns while shopping from Shopify stores or merchants, might have been a plus.
The Zacks Consensus Estimate for online store sales is pegged at $57.16 billion, reflecting growth of 6.9% from the year-ago reported figure.
This apart, strengthening relationships with third-party sellers on the back of solid solution offerings might have remained a positive. The consensus mark for sales generated by third-party sellers is pegged at $33.43 billion, reflecting growth of 16.6% from the figure reported in the prior-year quarter.
AMZN’s growing efforts in grocery retail are expected to have benefited its quarterly performance.
Solid momentum across the company’s Fresh grocery stores across the United States is anticipated to have contributed well to AMZN’s grocery sales in the third quarter. A solid network of Whole Foods Store and Amazon Go stores might have driven the company’s physical store sales.
The consensus mark for the third quarter’s physical store sales is pegged at $5.02 billion, indicating growth of 7% from the figure reported in the year-ago quarter.
The strength of Prime Video is expected to have contributed well. Expanding original content, regional content and the overall content portfolio on Prime Video are expected to have driven the Prime subscription in the to-be-reported quarter.
We expect retail perks associated with Prime, along with strength in Prime Video, are likely to have continued aiding Amazon’s subscription revenue growth in the quarter under review. Also, the growing momentum in Amazon Music might have been a positive.
The Zacks Consensus Estimate for subscription service sales is pegged at $10.12 billion, reflecting growth of 13.6% from the year-ago reported figure.
AWS Portfolio Momentum to Consider
Amazon’s expanding Amazon Web Services (“AWS”) portfolio is expected to have benefited its third-quarter performance.
In the quarter under review, AWS expanded Amazon Bedrock, a fully managed foundation model (“FM”) service. It added Cohere as an FM provider to Bedrock. It also added the latest FMs from Anthropic and Stability AI, namely Claude 2 and Stable Diffusion XL 1.0, respectively, to Bedrock.
The company announced the general availability of AWS Entity Resolution, which enables organizations to analyze, match and link related records stored across various applications, channels and data stores seamlessly.
It also unveiled a new HIPAA-eligible service called AWS HealthScribe, powered by speech recognition and generative AI technology.
We expect all these initiatives to have helped Amazon win customers. This, in turn, is expected to have boosted AWS’s third-quarter revenues, whose consensus mark is pinned at $23.19 billion, up 12.9% from the year-ago reported figure.
Smart Device Portfolio Strength
Amazon’s strengthening Echo device family might have contributed well. It expanded its Echo devices’ lineup by introducing Echo Show 8, Echo Hub and Echo Frames during the quarter under review.
The firm boosted its Fire TV family with the all-new Fire TV Stick 4K Max, Fire TV Stick 4K and Fire TV Soundbar. It also introduced an upgraded Fire TV experience with generative AI.
This apart, AMZN expanded its mesh WiFi system offerings with the launch of eero Max 7. Also, Amazon launched Blink Outdoor 4 to expand its smart camera offerings.
All the abovementioned factors are expected to have aided AMZN’s quarterly performance.
However, the impacts of rising inflationary pressure and unfavorable foreign currency fluctuations might be reflected in the upcoming results.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Amazon this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here, as you see below.
Amazon has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
AMZN has a Zacks Rank #3 at present.
Stocks to Consider
Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this season.
GoDaddy is scheduled to release third-quarter 2023 results on Nov 2. The Zacks Consensus Estimate for GDDY’s earnings is pegged at 71 cents per share, suggesting growth of 12.7% from the prior-year period’s reported figure.
Carrier Global (CARR - Free Report) has an Earnings ESP of +4.16% and a Zacks Rank #3 at present.
Carrier is set to report third-quarter 2023 results on Oct 26. The Zacks Consensus Estimate for CARR’s earnings is pinned at 78 cents per share, suggesting growth of 11.4% from the prior-year period’s reported figure.
Itron (ITRI - Free Report) has an Earnings ESP of +14.39% and a Zacks Rank #1 at present.
Itron is scheduled to release third-quarter 2023 results on Nov 2. The Zacks Consensus Estimate for ITRI’s earnings is pegged at 51 cents per share, suggesting a jump of 121.7% from the prior-year quarter.
Image: Bigstock
What to Expect Ahead of Amazon's (AMZN) Q3 Earnings Release?
Amazon (AMZN - Free Report) is scheduled to report third-quarter 2023 results on Oct 26.
For the third quarter, Amazon expects revenues in the band of $138-$143 billion. Net sales are expected to grow 9-13% from the year-ago quarter’s reported figure.
The Zacks Consensus Estimate for net sales is pegged at $141.61 billion, indicating growth of 11.4% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for third-quarter earnings is pegged at 58 cents per share, significantly up from 20 cents reported in the year-ago quarter.
Earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same once, the average surprise being 40.96%.
Amazon.com, Inc. Price and EPS Surprise
Amazon.com, Inc. price-eps-surprise | Amazon.com, Inc. Quote
Prime, Retail & Streaming Momentum to Note
Amazon’s solid Prime momentum, along with its strengthening distribution network, are expected to have aided online retail business’ performance in the third quarter.
Prime benefits, including a strong loyalty system, customer-friendly offers, quick grocery delivery services and robust Prime Free One-Day and Prime Free Same-Day Delivery services, are expected to have aided Amazon’s customer momentum in the quarter under review.
AMZN’s strong performance during its mega shopping event Prime Day, conducted at the beginning of the third quarter, is likely to have driven sales in the to-be-reported quarter.
The introduction of the Buy with Prime app for Shopify, which enables Prime members to avail of various Prime benefits like quick and free delivery and easy returns while shopping from Shopify stores or merchants, might have been a plus.
The Zacks Consensus Estimate for online store sales is pegged at $57.16 billion, reflecting growth of 6.9% from the year-ago reported figure.
This apart, strengthening relationships with third-party sellers on the back of solid solution offerings might have remained a positive. The consensus mark for sales generated by third-party sellers is pegged at $33.43 billion, reflecting growth of 16.6% from the figure reported in the prior-year quarter.
AMZN’s growing efforts in grocery retail are expected to have benefited its quarterly performance.
Solid momentum across the company’s Fresh grocery stores across the United States is anticipated to have contributed well to AMZN’s grocery sales in the third quarter. A solid network of Whole Foods Store and Amazon Go stores might have driven the company’s physical store sales.
The consensus mark for the third quarter’s physical store sales is pegged at $5.02 billion, indicating growth of 7% from the figure reported in the year-ago quarter.
The strength of Prime Video is expected to have contributed well. Expanding original content, regional content and the overall content portfolio on Prime Video are expected to have driven the Prime subscription in the to-be-reported quarter.
We expect retail perks associated with Prime, along with strength in Prime Video, are likely to have continued aiding Amazon’s subscription revenue growth in the quarter under review. Also, the growing momentum in Amazon Music might have been a positive.
The Zacks Consensus Estimate for subscription service sales is pegged at $10.12 billion, reflecting growth of 13.6% from the year-ago reported figure.
AWS Portfolio Momentum to Consider
Amazon’s expanding Amazon Web Services (“AWS”) portfolio is expected to have benefited its third-quarter performance.
In the quarter under review, AWS expanded Amazon Bedrock, a fully managed foundation model (“FM”) service. It added Cohere as an FM provider to Bedrock. It also added the latest FMs from Anthropic and Stability AI, namely Claude 2 and Stable Diffusion XL 1.0, respectively, to Bedrock.
The company announced the general availability of AWS Entity Resolution, which enables organizations to analyze, match and link related records stored across various applications, channels and data stores seamlessly.
It also unveiled a new HIPAA-eligible service called AWS HealthScribe, powered by speech recognition and generative AI technology.
We expect all these initiatives to have helped Amazon win customers. This, in turn, is expected to have boosted AWS’s third-quarter revenues, whose consensus mark is pinned at $23.19 billion, up 12.9% from the year-ago reported figure.
Smart Device Portfolio Strength
Amazon’s strengthening Echo device family might have contributed well. It expanded its Echo devices’ lineup by introducing Echo Show 8, Echo Hub and Echo Frames during the quarter under review.
The firm boosted its Fire TV family with the all-new Fire TV Stick 4K Max, Fire TV Stick 4K and Fire TV Soundbar. It also introduced an upgraded Fire TV experience with generative AI.
This apart, AMZN expanded its mesh WiFi system offerings with the launch of eero Max 7. Also, Amazon launched Blink Outdoor 4 to expand its smart camera offerings.
All the abovementioned factors are expected to have aided AMZN’s quarterly performance.
However, the impacts of rising inflationary pressure and unfavorable foreign currency fluctuations might be reflected in the upcoming results.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Amazon this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here, as you see below.
Amazon has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
AMZN has a Zacks Rank #3 at present.
Stocks to Consider
Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this season.
GoDaddy (GDDY - Free Report) has an Earnings ESP of +14.09% and a Zacks Rank #1 at present. You can see the complete list of today's Zacks #1 Rank stocks here.
GoDaddy is scheduled to release third-quarter 2023 results on Nov 2. The Zacks Consensus Estimate for GDDY’s earnings is pegged at 71 cents per share, suggesting growth of 12.7% from the prior-year period’s reported figure.
Carrier Global (CARR - Free Report) has an Earnings ESP of +4.16% and a Zacks Rank #3 at present.
Carrier is set to report third-quarter 2023 results on Oct 26. The Zacks Consensus Estimate for CARR’s earnings is pinned at 78 cents per share, suggesting growth of 11.4% from the prior-year period’s reported figure.
Itron (ITRI - Free Report) has an Earnings ESP of +14.39% and a Zacks Rank #1 at present.
Itron is scheduled to release third-quarter 2023 results on Nov 2. The Zacks Consensus Estimate for ITRI’s earnings is pegged at 51 cents per share, suggesting a jump of 121.7% from the prior-year quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.